Online jobs and learning portal Seek has confirmed its Chinese unit Zhaopin is speaking to potential investors amid speculation e-commerce giant Alibaba is keen to tip “hundreds of millions of dollars” into the company.
Seek told the ASX on Wednesday that Zhaopin and its shareholders were holding discussions with “a number of parties” on the subject of new investment and whether this could better support Zhaopin’s long-term growth aspirations.
“Seek regularly assesses strategic options to maximise the long-term growth aspirations of its investments,” the company said.
Seek did not name Alibaba directly and stressed that the discussions may or may not lead to anything. The $US760 billion ($1 trillion) Alibaba is often referred to as the Amazon of China.
The company’s statement comes after online tech news publication The Information reported that Alibaba was in talks to invest hundreds of millions of dollars in Zhaopin, citing people familiar with the matter.
“Alibaba, whose online marketplaces serve as a platform for millions of Chinese businesses, also operates China’s biggest cloud computing services platform,” wrote The Information’s Juro Osawa.
The report said an investment could lead to collaboration between the internet giant and its vast customer base with Zhaopin’s data on companies and jobs.
Shares in the $6.8 billion SEEK rose as much as 13.7 per cent to $21.74 on Wednesday.
SEEK delisted Zhaopin from the New York Stock Exchange in 2017 in a deal with Chinese private equity firms FountainVest and Hillhouse which saw the ASX-listed Seek retain its 61 per cent stake.
Seek posted a net loss of $111.7 million for the year ending June 30 but pointed to signs of a pandemic recovery in its Zhaopin unit as a reason for optimism. “Zhaopin was the first to experience the impact of COVID-19 and recovered well in Q4-FY20,” Seek chief executive Andrew Bassat said in August.
“The resilience of Zhaopin’s H2 FY20 result bodes well for a robust recovery when conditions return to normal.”
Seek had already cancelled its final dividend before the announcement of its full year results to preserve cash while the outlook remains so uncertain.
The company also said its aspirational goal of $5 billion in annual revenue by 2025 would likely to be impacted by COVID-19.
Source: Thanks smh.com