Entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion, in a deal that moves the Chinese e-commerce leader closer to a public listing.

Alibaba is looking to raise about a third of the $7.1 billion through issuance of equity to shareholders, one of the sources told Reuters.

A second source also confirmed the talks, but said Temasek has not made a final decision on the investment.

Alibaba was not immediately available to comment and a Temasek spokesman declined to comment.

Temasek bought Alibaba Group shares from the Chinese company's employees in September 2011 in a tender offer in which DST Global, Silver Lake and Yunfeng Capital also participated.

(Reporting by Saeed Azhar and Denny Thomas; Editing by Muralikumar Anantharaman)

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