Consortium’s $1.6-bn investment values Alibaba Group at $32 billion

A consortium comprising Singapore's sovereign wealth fund Temasek Holdings, Russian billionaire Yuri Milner-led investment fund DST Global and private equity firm Silver Lake Partners are among investors that have agreed to place $1.6 billion in Alibaba Group, a transaction that values China's largest e-commerce company at $32 billion.

Along with Temasek, DST Global and Silver Lake, Chinese private equity firm Yunfeng Capital are leading a $1.6-billion tender offer of just under 5 per cent for the employee and shareholder stock of privately held Alibaba.

Shanghai-based Yunfeng was co-founded in 2010 by Alibaba's chairman and CEO Jack Ma, and other Chinese entrepreneurs.

Temasek already holds a stake in Alibaba in which Yahoo is the single largest shareholder with a 39-per cent stake, now valued at $12.5 billion after the investment made by the consortium.

But this stake sale is not by Alibaba to raise funds, but by its employees and shareholders.

''This liquidity program will allow our people to focus on growing our business and continuing to create value,'' Jack Ma, Alibaba's chief executive, said in a statement. ''We believe the high-quality investors making commitments to this important program share our mission and philosophy, and we welcome them as shareholders of the company.''

But the stake purchase may be a smart move by Silver Lake and DST, who, along with Silicon Valley venture firm Andreessen Horowitz, are reportedly trying to launch a takeover of Yahoo.

Any buyer of Yahoo would first sell Yahoo's stake in Alibaba and then dispose off the Internet company's 35-per cent stake in Yahoo Japan in order to recover a large slice of the investment in Yahoo's acquisition.