HONG KONG - Sovereign wealth fund China Investment Corp (CIC) is in advanced talks to buy an up to $2 billion stake in Alibaba Group , sources told Reuters, as the Chinese e-commerce powerhouse looks to secure the last of the funding it needs to buy back part of its stake from Yahoo Inc .
Yahoo and Alibaba struck a deal last week whereby the Chinese company agreed to buy back up to half of the 40 percent stake in itself held by Yahoo for $7.1 billion, valuing Alibaba at $35 billion.
Alibaba is raising $4.6 billion of that target through an issue of preferred shares, bank loans and the sale of a stake to existing shareholders - Singapore state investor Temasek Holdings Pvt Ltd and DST Global. Another $2.5 billion in cash would allow Alibaba to fund the full $7.1 billion purchase.
Sources with direct knowledge of the matter said CIC's $2 billion purchase of the Alibaba stake would help the e-commerce company complete its funding for the Yahoo purchase.
Alibaba is also in talks with private equity firms that would assist in funding the remaining $500 million, sources said, including Bain Capital, Blackstone Group LP , and Hony Capital.
The sources declined to be named because the discussions were private. Alibaba, Blackstone, CIC and Hony all declined comment. Bain could not immediately be reached for comment.
