China's Alibaba says may pay dividend if no M&A

HONG KONG, May 7 (Reuters) - China's top e-commerce company Alibaba (1688.HK) said on Thursday it might consider distributing a dividend to shareholders from its ample cash stockpile if it cannot conclude an acquisition deal with any suitable candidate.

"The board of directors has already put the dividend issue on the agenda and will consider this seriously ... it won't need to wait too long," Founder and Chairman Jack Ma told reporters. He did not give a timeframe.

Hong Kong-listed Alibaba shares, which surged 27.6 percent in the first quarter of 2009, jumped as much as 15.4 percent to HK$11.82 after Ma's comment on Thursday, the highest since June 23, 2008. The stock closed at HK$11.70, up 14.65 percent.

"The company has ample cash and if it doesn't find a suitable acquisition candidate -- I don't think there's a feasible acquisition target at the moment -- then Alibaba can distribute the cash," said Kevin Tam, analyst at Everbright Securities.

"Alibaba's business is directly related to the global economic trends and with signs that the global economy is improving and the Chinese economy is improving, plus with such an impressive membership growth, market sentiment should really turn positive."

Alibaba has cash on hand of 6.9 billion yuan (US$1 billion), including the US$400 million proceeds raised from its IPO in late 2007, according to CEO David Wei.

Wei said the parent's US$1.3 billion cash, raised from the sale of Alibaba's stake via the IPO, has mostly been untouched.

It is also studying opportunities to acquire e-commerce platforms, applications and related technology, Wei added.

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