New York-listed Greatest Inc, a Chinese language logistics agency backed by e-commerce big Alibaba Group Holding Ltd, is contemplating a sale as a part of a strategic overview, six individuals with data of the matter stated.
With the endorsement of Alibaba, its largest shareholder, Greatest has tapped monetary advisers to discover choices as its shares have been underperforming and are worth a fifth of its IPO price in 2018, two of the individuals concerned within the discussions stated.
Billionaire Jack Ma’s Alibaba, which owns 33% of the agency, in addition to Greatest founder and CEO Johnny Chou, who has a 11% stake on a completely diluted foundation, might each find yourself promoting their stakes, 5 of the individuals stated.
No formal sale course of has been launched, and the corporate and Alibaba haven’t determined which choice to take because the strategic overview continues to be underway, cautioned the people, together with two who had been approached a few sale.
The individuals declined to be named as the knowledge is confidential.
A Greatest spokeswoman denied {that a} sale was into consideration. She stated Chou continued to consider within the “vibrant future and long-term value” of the corporate’s built-in good provide chain and logistics options, and had no plan to promote his stake.
The corporate, which has a market value of $790 million, didn’t touch upon different points together with whether or not it was conducting a enterprise overview.
Alibaba stated in an emailed assertion the knowledge was incorrect, however didn’t elaborate.
The Greatest discussions are taking place in opposition to the backdrop of a regulatory crackdown by Chinese language authorities on Ma’s enterprise empire together with an anti-trust probe of Alibaba and sharpening scrutiny of its monetary affiliate Ant Group.
Reuters was unable to find out whether or not the potential sale is linked to the probe.
The e-commerce group began contemplating a stake divestment late final yr after it discovered it troublesome to combine Greatest with different logistics firms below its portfolio, two of the individuals concerned within the discussions instructed Reuters.
Greatest tapped advisers to recommend strategic choices in direction of the top of 2020, they usually have approached a variety of consumers together with home supply main S.F. Holding Co Ltd and personal fairness companies for the sale of the stakes, they stated.
One of many potential consumers stated his agency had obtained what he described as a deal “teaser” a few sale of shares by Greatest in direction of the top of final yr and later about fundraising for one in every of its models.
S.F. didn’t reply to a request for remark.
Different choices the corporate is contemplating embody fundraising for its freight supply unit, three of the sources stated. Greatest might additionally promote its finance leasing enterprise, one stated.
The deal, if launched and accomplished, will add to a logistics sector consolidation in China. Reuters reported in December retailer JD.com and Carlyle, amongst others, are bidding for South Korean CJ Group’s China logistics enterprise.
Greatest was based in 2007 by former Google govt Chou and debuted in New York in 2017. With a 12% share of the Chinese language express supply market in 2019, it’s one in every of a number of couriers that work with Alibaba’s logistics division Cainiao.
The corporate’s shares have fallen almost 70% over the previous yr as its earnings have been hit onerous by the fallout from the COVID-19 pandemic. As compared, the S&P/BNY Mellon China Choose ADR Index, which tracks Chinese language companies listed in New York, has gained 45% over the identical interval.
Reuters reported in August that Greatest was looking for a Hong Kong itemizing for its express supply and freight supply companies, eager to spice up its valuation and set up an investor base nearer to China.
However the itemizing prospects have been dented by its falling stock price and weak quarterly outcomes, stated the 2 individuals cited earlier.
(PTI)
