Alibaba seeks funding from Temasek to buy back stake from Yahoo

Chinese e-commerce company Alibaba Group has held talks with Singapore's sovereign wealth fund Temasek Holdings for funding to buy the 40-per cent stake held by Yahoo in Alibaba, Bloomberg today reported, citing people familiar with the matter.

Temasek is not interested in buying Yahoo, but may provide funding in return for a bigger share of privately-owned Alibaba Group, the news agency said.

Temasek already holds a stake in Alibaba in which Yahoo is the single largest shareholder with a 40-per cent stake, now valued at $12.5 billion after the investment made by a consortium.

Yahoo had paid $1 billion in 2005 for acquiring 40 per cent of Alibaba, and Temasek, private equity firm Silver Lake and Russia's Digital Sky Technologies bought $1.6 billion worth of stock from Alibaba employees last month, which valued the e-commerce company at $32 billion. (See: Consortium's $1.6-bn investment values Alibaba Group at $32 billion)

Alibaba, Silver Lake and DST are already planning to form a group to try to launch a takeover of Yahoo, several media reported late last month.

Last week Alibaba's chairman Jack Ma said at a Stanford University event near Palo Alto, California, "'We are very interested in Yahoo''. He added talks had hit a block on ''political issues,'' rather than financial ones.