HONG KONG, Jan 20 (Reuters) - New York-listed Best Inc
, a Chinese logistics firm backed by e-commerce giant
Alibaba Group Holding Ltd, is considering a sale as
part of a strategic review, six people with knowledge of the
With the endorsement of Alibaba, its biggest shareholder,
Best has tapped financial advisers to explore options as its
shares have been underperforming and are worth a fifth of its
IPO price in 2018, two of the people involved in the discussions
Billionaire Jack Ma's Alibaba, which owns 33% of the firm,
as well as Best founder and CEO Johnny Chou, who has a 11% stake
on a fully diluted basis, could both end up selling their
stakes, five of the people said.
Best's stock was up 8.8% in morning trade in New York on
Wednesday, after having jumped as much as 14.6% earlier in the
No formal sale process has been launched, and the company
and Alibaba have not decided which option to take as the
strategic review is still underway, cautioned the individuals,
including two who were approached about a sale.
The people declined to be named as the information is
A Best spokeswoman denied that a sale was under
consideration. She said Chou continued to believe in the "bright
future and long-term value" of the company's integrated smart
supply chain and logistics solutions, and had no plan to sell
The company, which has a market value of $790 million, did
not comment on other issues including whether it was conducting
a business review.
Alibaba said in an emailed statement the information was
incorrect, but did not elaborate.
The Best discussions are happening against the backdrop of a
regulatory crackdown by Chinese authorities on Ma's business
empire including an anti-trust probe of Alibaba and sharpening
scrutiny of its financial affiliate Ant Group.
Reuters was unable to determine whether the potential sale
is linked to the probe.
The e-commerce group started considering a stake divestment
late last year after it found it difficult to integrate Best
with other logistics companies under its portfolio, two of the
people involved in the discussions told Reuters.
Best tapped advisers to suggest strategic options towards
the end of 2020, and they have approached a number of buyers
including domestic delivery major S.F. Holding Co Ltd
and private equity firms for the sale of the stakes,
One of the potential buyers said his firm had received what
he described as a deal "teaser" about a sale of shares by Best
towards the end of last year and later about fundraising for one
of its units.
S.F. did not respond to a request for comment.
Other options the company is considering include fundraising
for its freight delivery unit, three of the sources said. Best
could also sell its finance leasing business, one said.
The deal, if launched and completed, will add to a logistics
sector consolidation in China. Reuters reported in December
retailer JD.com and Carlyle, among others, are bidding for South
Korean CJ Group's China logistics business.
Best was founded in 2007 by former Google executive Chou and
debuted in New York in 2017. With a 12% share of the Chinese
express delivery market in 2019, it is one of several couriers
that work with Alibaba's logistics division Cainiao.
The company's shares fell nearly 70% over the past 12
months, as of Tuesday's close, as its earnings have been hit
hard by the fallout from the COVID-19 pandemic. In comparison,
the S&P/BNY Mellon China Select ADR Index, which
tracks Chinese firms listed in New York, has gained 45% over the
Reuters reported in August that Best was seeking a Hong Kong
listing for its express delivery and freight delivery
businesses, keen to boost its valuation and establish an
investor base closer to China.
But the listing prospects have been dented by its falling
stock price and weak quarterly results, said the two people
($1 = 6.4630 Chinese yuan renminbi)
(Reporting by Julie Zhu and Kane Wu; Editing by Sumeet
Chatterjee, Carmel Crimmins and Ramakrishnan M.)