Yahoo is reconsidering a proposal to dramatically reduce its 40% stake in the Chinese Internet company Alibaba Holdings and to sell its 35% stake in Yahoo Japan, according to multiple reports that value the overall transaction at between $17 billion and $18 billion. Yahoo’s market capitalization before news broke of the possible deal was about $18.5 billion. The deal is valued at close to $14 a Yahoo share, sources said. The way it might work is that Alibaba and Softbank, Yahoo Japan’s majority owner, would create new separate entities that would consist of stock and some operating assets. This would allow Yahoo to swap out most of its stake in Alibaba and all of its stake in Yahoo Japan. Under US tax law the transaction would count as a swap not subject to taxes rather than a sale, which would. Yahoo is expected to keep a 15% percent stake in Alibaba which would allow it to hold on to a piece of the fast-growing company. It is also possible that investment companies Silver Lake and TPG Capital could join the deal for a minority stake. Yahoo’s board may still reject the offers but momentum seems to be building toward a deal. Separately, however, Alibaba and Softbank stand ready to bid for all of Yahoo, sources said, in the event the board nixes the plan. While the once high-flying Yahoo has been eclipsed by Facebook and Google, it remains one of the most popular Internet portals. Its stakes in the Asian companies are the company’s most valuable assets, and the proposed deal would allow Yahoo to return cash to its investors and focus on rejuvenating its US operations.
Reports: Yahoo Reconsiders Proposal To Sell Valuable Assets In China, Japan
What's Hot on Deadline
Hollywood Cowardice: George Clooney Explains Why Sony Stood Alone In North Korean Cyberterror Attack
Sony Responds To President Obama's Criticism: "We Had No Choice," Still Hope To Release 'The Interview'
Obama: Sony Made Mistake Pulling 'The Interview'; U.S. Will Respond Proportionally At Time And Place We Choose -- Update
'The Interview' Release Would Have Damaged Kim Jong Un Internally, Says Rand Expert Who Saw Movie At Sony's Request
More From Team
- Embeth Davidtz & Jack Noseworthy Join 'Marilyn' Miniseries; 'Lumen' Pilot Rounds Out Cast
- HBO's 'The Normal Heart' To Receive PGA's Stanley Kramer Award
- Watch President Obama Discuss Sony Hack In Year-End Press Conference (Live Stream)
- Comedy Central Moves Up '@Midnight' For 2 Weeks Ahead Of Larry Wilmore Premiere
- MPAA Says North Korea Attack On Sony Is “Despicable, Criminal Act”
- Hulu Acquires 'Fargo' Miniseries In Deal With MGM