By Elzio Barreto
HONG KONG (Reuters) - Chinese e-commerce company Alibaba Group Holding Ltd has decided to pursue an initial public offering in New York after talks with Hong Kong regulators broke down over a listing in the Asian financial hub, sources familiar with the discussions said on Wednesday.
The decision ends weeks of negotiations between the company, the Hong Kong stock exchange and the city's regulators over Alibaba's shareholding structure, which had delayed the launch of a sale that may be worth more than $15 billion.
The debate centred on the ability for Alibaba to list in Hong Kong and, at the same time, allow its "partners" - a group of founders and senior employees - to keep control over the makeup of its board.
The choice of New York should make it easy for Alibaba founder Jack Ma and his management team to keep a tight grip on the company with a dual share structure that's common to Internet companies including Google Inc and Facebook Inc.
"We've come to the end of dialogue with Hong Kong and we're pivoting to the U.S. to start the listing process," a company source familiar with the discussions said.
Alibaba has engaged U.S. law firms to start working on its IPO and will soon be hiring banks to manage the listing, added the company source, who was not authorized to speak publicly on the matter.
Officials at Alibaba and the Hong Kong stock exchange declined to comment.
The IPO would ride a wave of bullish views on the company after its revenue soared 71 percent in the first quarter to $1.4 billion, with profits nearly tripling to $669 million, according to figures released in July by Yahoo Inc, one of its key shareholders.
Several brokerages raised their valuation on Alibaba because of the strong earnings growth, pegging it as high as $120 billion, above the $100 billion valuation put on Facebook before its IPO last year. Yahoo has a market capitalisation of about $32 billion.
The IPO is hugely important to two of Alibaba's major shareholders, U.S. Internet giant Yahoo and Japan's Softbank Corp, because Alibaba's market valuation would add billions of dollars to the two companies' assets.
Yahoo, which owns 24 percent of Alibaba, is keen to sell part of its stake. Softbank is the company's biggest shareholder with a 35 percent stake, while Ma, former Chief Financial Officer and co-founder Joe Tsai, and other company executives own about 10 percent.
(Editing by Matt Driskill and Edwina Gibbs)