Companies reach Alipay agreement

TORONTO - Alibaba Group Holding Ltd reached an agreement with shareholders Yahoo! Inc and Softbank Corp over the spinoff of its Alipay unit that will give Alibaba as much as $6 billion if the business sells shares to the public.

That payout is at least $2 billion in the case of an initial public offering or "other liquidity event", the companies said on Friday in a statement. Within the range, the exact amount to be paid to Alibaba will be calculated by multiplying the total equity value of Alipay by 37.5 percent.

Hong Kong-based Alibaba transferred Alipay, China's most- popular online-payment service, to a Chinese company controlled by Alibaba Chairman Jack Ma in August 2010, a transaction that wasn't ratified by Alibaba directors. Ma said earlier this month that Yahoo and Softbank and Alibaba would receive "very large" compensation for the loss of the unit, according to an interview with the China Entrepreneur magazine.