Alibaba Group Prices US$4,500 Million Offering of Convertible Senior Notes
Summary
HANGZHOU, China, May 24, 2024--(BUSINESS WIRE)--Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988 (HKD Counter) and 89988 (RMB Counter), "Alibaba," "Alibaba Group" or the "Company") today announced the pricing of its private offering of US$4,500 million aggregate principal amount of 0.50% Convertible Senior Notes due 2031 (the "Notes") to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and to certain non-U.S. persons in offshore transaction in reliance on Regulation S under the Securities Act (the "Notes Offering"). The Notes Offering is expected to close on May 29, 2024, subject to customary closing conditions.Alibaba Group estimates that the net proceeds from the Notes Offering will be approximately US$4,436 million (or US$4,930 million if the initial purchasers option is exercised in full), after deducting the initial purchasers discounts and estimated expenses payable by the Company.Alibaba Group intends to use the net proceeds from the Notes Offering to (i) repurchase approximately 14.8 million of its American depositary shares ("ADSs"), each currently representing eight ordinary shares, pursuant to its existing share repurchase program, concurrently with the pricing of the Notes Offering in privately negotiated transactions effected through one or more of the initial purchasers or their affiliates, as its agent, at a price per ADS equal to US$80.80, the last reported sale price per ADS on the NYSE on May 23, 2024 (the "Concurrent Repurchase"); (ii) fund further share repurchases, from time to time, under the Companys existing share repurchase program; and (iii) fund the US$573.75 million cost of entering into the capped call transactions described below.When issued, the Notes will be general senior unsecured obligations of Alibaba Group. The capped call transactions are generally expected to reduce potential dilution to the ADSs and the ordinary shares of the Company represented thereby upon any conversion of the Notes and/or offset any cash payments that the Company will be then required to make in excess of the principal amount of the converted Notes, with such reduction and/or offset subject to a cap that will initially be $161.6000, which represents a premium of 100% over the last reported sale price of $80.80 per ADS on the NYSE on May 23, 2024, and is subject to certain customary adjustments, and subject to the Companys ability to elect, subject to certain conditions, to settle the capped call transactions in cash, in whole or in part (in which case the Company would not receive any ADSs from the Option Counterparties to the extent of the cash settlement of the capped call transactions). In addition, any of the Option Counterparties may choose to engage in, or to discontinue engaging in, any of these transactions and activities with or without notice at any time, and their decisions will be in their sole discretion and not within the Companys control.The Concurrent Repurchase is expected to facilitate the initial hedges by investors who desire to hedge their investments in the Notes, as the Company intends to repurchase the entire expected initial delta of the transaction, after taking into account purchases made by Option Counterparties in connection with establishing their initial hedges of the capped call transactions. It envisions that its customers will meet, work and live at Alibaba, and that it will be a good company that lasts for 102 years.This press release contains forward-looking statements.
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