Jack Ma-Backed Ant Group to buy back shares at 70% lower valuation than IPO – The Carlyle Group (NASDAQ: CG), Tencent Holdings (OTC: TCEHY)

Billionair Jack Ma-Supported Ant Group Company It plans to buy back up to 7.6% of the shares to retain skilled personnel and provide an exit for investors who have been affected by the company’s regulatory hurdles.

according to a report By Bloomberg on Friday, Ant Group has publicly announced its plan to buy back its shares, which would result in an estimated valuation of $78.5 billion. The valuation reflects a significant drop of nearly 70% compared to the company’s market capitalization of $280 billion during the IPO, which was eventually abandoned in late 2020.

The shares being repurchased will be used for Ant’s employee incentive program, which aims to attract top-tier talent.

According to a company statement, the individual limited partners of two entities that make up the majority of Ant shareholders — most of whom are Ant executives — have voluntarily decided not to sell shares back to Ant out of a long-term commitment to the company.

Chinese regulators are ending a two-year crackdown on the once free-spirited tech giants after they imposed more than $1 billion in fines on Ant and Tencent Holdings Ltd. (OTC:TCEHY) on Friday, Bloomberg reported.

See also: Once the largest ever initial public offering is announced, Alibaba’s subsidiary Ant Financial suffers a 63% drop in earnings.

Ant Group has completed a restructuring requested by Beijing, negatively impacting profitability and hampering growth for a platform that spans sectors such as lending, insurance and asset management.

The buyback represents “a good opportunity for investors to make some money back as Ant’s earnings growth has slowed dramatically,” said Francis Chan, an analyst at Bloomberg Intelligence, adding that overseas minority shareholders could take this opportunity to reduce their stakes.

Prominent American investors, such as Silver Lake Management LLCAnd Warburg Pincus LLC And Carlyle Group (NASDAQ:CG), played a major role in the funding round. Notable contributors are also included GIC PteAnd National Treasury BerhadAnd Canada Pension Plan Investment Board And Temasek Holdings Pte.

In early March, Jack Ma returned to China after a long period of travel abroad. The government encouraged his return to the mainland to show its support for private entrepreneurs.

More than two years ago, Chinese regulators abruptly halted the Ant Group’s initial public offering, causing major turmoil in global capital markets, the outlet reported. Since then, the fintech giant, which operates in various sectors including consumer lending, wealth management and online payments, has been subject to new regulations.

Now read: Elon Musk says Jack Ma “makes a strong case” for computers being smarter than humans

picture: Nærings- og fiskeridepartementet via Flickr