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Investing.com – Alibaba ADRs (NYSE:BABA) slipped 2.3% Wednesday on a Bloomberg report that the online giant is in talks with Shanghai Media Group about a potential deal involving its 30% stake in Weibo, a Twitter-like social media platform.
Weibo’s stock (NASDAQ:WB) fell 2%.
The discussions could lead to the state-owned conglomerate purchasing all of Alibaba’s stake in Weibo, the report said.
Alibaba and its affiliates have over the years built a sprawling portfolio of media assets that include newspapers, television-production companies, social media and advertising.
A wary government, concerned about the company’s influence on public opinion, wants Alibaba to offload some of those holdings, Bloomberg reported in March.
SMG, one of China’s largest state-owned media and cultural entities, stands a higher chance of gaining Beijing’s approval than a private acquirer. The group is a controlling shareholder of Oriental Pearl Group, which operates TV stations and entertainment portals, and also owns 20% in Shanghai Disney Resort, according to the firm’s website.
The report said deliberations are at an early stage and there’s no certainty they will result in a transaction.
