US duo lead on $586m sale of stake in China’s Twitter-like Weibo

Shearman & Sterling and Simpson Thacher & Bartlett have played key roles on Chinese internet giant Sina Corporation’s sale of a stake in the country’s Twitter-like site Weibo.


Shearman, fielding Beijing managing partner Lee Edwards, advised Nasdaq-listed Sina in the sale of a 18 per cent stake in its subsidiary Weibo Corporation to e-commerce business Alibaba Group in a deal valued at $586m (£377m). Sina has also granted an option to Alibaba to enable Alibaba to increase its ownership in Weibo to 30 per cent in the future. The transaction values Weibo at over $3bn (£1.9bn).

Alibaba, led in-house by general counsel Timothy Steinert, instructed Simpson Thacher as international adviser. The US firm’s team was headed by Hong Kong corporate partner Kathryn King Sudol. Chinese firm Fangda Partners, which opened an office in Hong Kong last year (23 April 2012), acted as its PRC counsel.

Under the agreement, Alibaba and Weibo will co-operate in the area of user account connectivity, data exchange, online payment and online marketing, among other things, and will explore new business models for social commerce based on the interactions of the hundreds of millions of users on Weibo and on Alibaba’s e-commerce platforms.

Background to this deal:

In 2007, Freshfields advised on its IPO and listing on the Hong Kong Stock Exchange. Following the listing, Alibaba appointed Freshfields Hong Kong corporate partner Steinert as its general counsel. In 2012, the group took its Hong Kong-listed unit private in a $2.5bn deal (1 March 2012) and later repurchased half of Yahoo!’s 40 per cent stake in the group for $7.1bn (21 May 2012). In both transactions, Freshfields acted as the lead counsel to Alibaba, led by China chair Teresa Ko and Hong Kong finance partner David Winfield. The firm was not involved in the Weibo acquisition.

Sina listed its shares on Nasdaq in 2000 and in 2009 launched Chinese microblogging website Sina Weibo, which has become one of the country’s most popular social media sites. It was advised on the IPO by now-defunct US firm Coudert Brothers. The underwriters were advised by Sullivan & Cromwell.

Following the collapse of Coudert, Sina turned to Shearman for US law advice, with Beijing head Lee Edwards the key relationship partner. Edwards has advised Sina on a number of M&A transactions, including in recent years its sale of an interest in China Online Housing Technology Corporation to CRIC Holdings for $770m.