Jack Ma supported Ant Group Company He proposes to buy back up to 7.6% of the shares in an effort to retain talent and provide an opportunity to reduce the stakes of investors who have been caught up in the company’s years-old regulatory campaign.
Each investor will be allowed to sell up to 7.6% of their shares rather than cashing them out entirely, according to a person familiar with the matter, who asked not to be identified while discussing the private details of the arrangement.
The company said in a statement on Saturday that Ant’s planned share buyback would value the company at 567.1 billion yuan ($78.5 billion). That’s nearly 70% less than the $280 billion market capitalization obtained in 2020 for the canceled initial public offering.
Chinese regulators are ending a two-year crackdown on the once free-spirited tech giants after they imposed more than $1 billion in fines on Ant and… Tencent Holdings Ltd. Friday. Ant has completed an overhaul ordered by Beijing, slashing profitability and curtailing growth in a sprawling platform that stretched into asset management lending and insurance.
Returning some money to shareholders could help Ant shift its focus to building business operations, relieving pressure from pre-IPO investors seeking an exit due to a valuation dip. Global funds struggled with how to value their investment in Ant in 2018 when the company was valued at nearly $150 billion.
This is a good opportunity for investors to get some money back as Ant’s earnings growth has slowed dramatically, said Francis Chan, an analyst at Bloomberg Intelligence. He said that minority overseas shareholders may take this opportunity to reduce their stakes.
Silver Lake Management LLCand Warburg Pincus LLC Carlyle Group They were among the largest backers of the United States in that funding round. Other companies putting money into Singapore include GIC Pte, National Treasury Berhadand the Canada Pension Plan Investment Board Temasek Holdings Pte.
Buyback plans
Ant said it would convert the repurchased shares into the company’s employee incentive scheme to attract talent.
According to the release, the individual limited partners of two entities that make up the majority of Ant shareholders — most of whom are Ant executives — have decided not to sell shares back to Ant due to a long-term commitment to the company.
The limited partners also committed to holding dividends in 2022 with Hangzhou Junhan and Hangzhou Junao to enhance the capital strength of the operation.
Overhang has been removed
Financial regulators led by the central bank fined Ant and its subsidiaries a total of 7.12 billion yuan on Friday, ending a two-year investigation into the company. Tencent was fined 2.99 billion yuan.
Tencent And Ant Alibaba Group Holding Co., Ltd. rose in New York circulation. A meaningful easing of restrictions on Ant — one of the most high-profile victims of President Xi Jinping’s sweeping crackdown on the country’s tech giants — would send a strong signal that policymakers are following through on recent pledges to support the industry.
With regulatory restrictions out of the way, Ant can spend more time building its business and even reviving its IPO.
Ant said in January that he had There are no plans public offering at that time. Still, company president Eric Jing He said In 2021, Ant will finally go public.
Ant repair
Ant co-founder Ma is back To China in early March after a long period of travel abroad. The government persuaded him to return to the mainland as a way to show the authorities’ support for private entrepreneurs, Bloomberg News said mentioned.
The move follows Ma’s decision to relinquishing control from Ant in January, and holds about 6.2% of the voting rights after the change. After that, Chairman of the Communist Party of Hangzhou praised Ant for the commitment of the party leadership, and demanded that local government departments solve the problems raised by the fintech company.
More than two years ago, Chinese regulators abruptly halted Ant’s initial public offering, sending shock waves through global capital markets. New rules have been imposed on the fintech giant, which has operations ranging from consumer lending and wealth management to online payments.
Central bank ordered Ant b folds All financial units in a holding company. It also required the company to open its payments app to competitors and cut improper linking of payments with other products, including lending services.
Ant is developing large-language model technology that will power ChatGPT-style services, joining a list of Chinese companies looking to win an edge in the next generation of AI. company invest nearly 20.5 billion yuan in research and development last year, doubling its annual spending on those efforts since 2019.
