July 8, 2023 11:05 am | 2 minutes read
billionaire Jack Ma-supports Ant Group Co. plans to repurchase up to 7.6% of shares to retain qualified employees and allow investors affected by the company’s regulatory roadblocks to exit.
According to a report by Bloomberg on Friday, Ant Group publicly stated its plan to buy back its shares, which would result in an estimated valuation of around $78.5 billion. The valuation reflects a substantial decline of nearly 70% compared to the company’s $280 billion market cap during its IPO, which was finally abandoned in late 2020.
The repurchased shares will be used for Ant’s employee incentive program, which aims to attract top-notch talent.
ENTER TO WIN $500 IN STOCKS OR CRYPT
Enter your email address and you’ll also receive the ultimate morning update from Benzinga AND a free gift card worth $30+!
According to a company statement, the individual limited partners of two companies that make up the majority of Ant’s shareholders – mostly consisting of Ant executives – have voluntarily decided not to sell their shares back to Ant because of their long-term commitment to the company.
Chinese regulators are ending a two-year crackdown on the country’s once permissive tech giants after slapping Ant and more than $1 billion in fines Tencent Holdings Ltd. (OTC:TCEHY) on Friday, Bloomberg reported.
Also Read: Alibaba’s fintech subsidiary Ant Financial, once touted as the biggest IPO of all time, suffers a 63% drop in earnings
Ant Group completed the Beijing-mandated restructuring process, which hurt profitability and hampered the growth of a platform that spanned sectors like lending, insurance and wealth management.
The buyback is a “good opportunity for investors to get some money back as Ant’s earnings growth has slowed significantly,” said Francis Chan, an analyst at Bloomberg Intelligence, adding that foreign minority shareholders could use this opportunity to buy their stakes to reduce.
Prominent US investors such as Silver Lake Management LLC, Warburg Pincus LLC And Carlyle Group Inc. (NASDAQ:CG) played a key role in the funding round. Notable contributors were also present GIC Pte, Khazanah National Berhad, Canada Pension Plan Investment Board And Temasek Holdings Pte.
In early March, Jack Ma returned to China after a long trip abroad. The government encouraged him to return to the mainland to show their support for private entrepreneurs.
More than two years ago, Chinese regulators suddenly halted Ant Group’s IPO, causing major disruption in global capital markets, the outlet reported. Since then, the fintech giant, which operates in various fields including consumer credit, wealth management and online payments, has been subject to new regulations.
Now Read: Elon Musk Says Jack Ma ‘Strongly Advocates’ Computers Are Smarter Than Humans
Photo: Nærings- og fisheridepartementet via flickr
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.