SingPost Surges to Record on Alibaba"s Stake Investment

Singapore Post Ltd. (SPOST) jumped to a

record after Alibaba Group Holding Ltd., China’s biggest e-commerce company, agreed to buy a 10 percent stake in the

company to develop its logistics in Southeast Asia.

SingPost shares climbed 11 percent to S$1.72 as of 9:16

a.m. in Singapore trading, set for its highest close since it

went public in 2003. Alibaba will spend S$312.5 million ($249

million) acquiring about 220 million new and existing shares and

the companies will enter talks for an e-commerce logistics

venture, the Singapore-based company said in a statement.

“There’s definitely synergies between the two companies,”

Andrea Isabel, an analyst at UOB-Kay Hian Holdings Ltd. in

Singapore, said by phone. “Alibaba doesn’t have their in-house

logistics and the partnership will definitely help them. The

deal will help SingPost build their presence in China.”

The purchase price of S$1.42 a share is 8.4 percent lower

than the close on May 27. The investment connects SingPost to

billionaire Jack Ma as he expands Alibaba’s logistics to build a

bigger network for shipping goods sold on its platforms as it

heads toward an IPO that may be bigger than Facebook Inc.

Yesterday’s deal will make the Hangzhou, China-based

company the second-largest investor in Singapore’s former state-owned mail service after Singapore Telecommunications Ltd. (ST),

SingPost Chief Executive Officer Wolfgang Baier said.

Singapore Telecommunications or SingTel’s stake in SingPost

will drop to about 23 percent from 26 percent, Baier said on a

conference call with reporters yesterday.

Alibaba Investments

In March, Alibaba agreed to invest about $692 million in

Intime Retail Group Co., owner of department stores and

supermarkets in China. In December, the company agreed to spend

HK$2.82 billion ($364 million) on home-appliance maker Haier

Electronics Group (1169) Co. and its logistics business.

SingPost’s sales from e-commerce business accounted for 26

percent of its revenue and that figure is expected to increase

further, Baier said, declining to provide figures.

SingPost shares have risen 31 percent this year, compared

with the 3.7 percent gain in the Singapore benchmark Straits

Times Index. (FSSTI)

Alibaba this month filed for an IPO. The company’s market

value is estimated at $168 billion according to analyst

estimates, bigger than 95 percent of the Standard Poor’s 500

Index. The company is looking to sell about a 12 percent stake,

people familiar with the matter have said, which would make the

offer around $20 billion based on the estimated value and

eclipse the IPOs of Facebook and Visa Inc.

Ma, the founder of Alibaba, has a net worth valued at $12.6

billion, according to the Bloomberg Billionaires Index, making

him the third-richest person in China.

To contact the reporter on this story:

Kyunghee Park in Singapore at

kpark3@bloomberg.net

To contact the editors responsible for this story:

Anand Krishnamoorthy at

anandk@bloomberg.net

Linus Chua, Robert Fenner

SingPost Surges to Record on Alibaba"s Stake Investment