Alibaba is preparing to file for an initial public offering in the US as soon as April, according to people with knowledge of the matter.

China’s largest e-commerce company is working with New York-based law firm Simpson Thacher and Bartlett as it gets ready to sell shares, said two of the people, who asked not to be identified as the process is private.

The filing may even come this month, one said. Shares of Yahoo! which owns a 24 per cent stake in Alibaba, rose on the news.

Alibaba is opting for a US listing as it struggles to persuade Hong Kong regulators to approve a proposed governance structure, it was said. Even after filing for a US offering, Alibaba could still decide to list in Hong Kong should regulators there approve its plan to give executives control over board nominations.

Alibaba may not outline its fundraising target from the IPO – a step typically taken just before a company begins to formally market its IPO to investors – for several months after the initial filing, one of the people said. The sale has the potential to be the largest first-time share offering since Facebook raised $16 billion in May 2013.

Alibaba's expansion since former English teacher Jack Ma started the company in his Hangzhou apartment in 1999 with two dozen items for sale mirrors China's emergence as an economic superpower. The success has made Mr Ma (49), one of China's richest people, with an estimated net worth of $11.4 billion, according to the Bloomberg Billionaires Index.

The IPO would allow Yahoo to begin selling its stake – which could be worth $37 billion at the average of analysts’ estimates of Alibaba’s value.

“A lot of people are investing in Yahoo as a proxy for Alibaba – in fact, I would say the majority of people are,” said Colin Gillis, a New York-based analyst at BGC Partners.

Alibaba has codenamed the IPO “Avatar”, according to sources. – (Bloomberg)