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Yahoo drops plan to spin off Alibaba stake

  • Yahoo Inc has said it scrapped a plan to
    spin off stake in Alibaba Group Holding Ltd, citing tax concerns, reported
    Reuters.

  • Yahoo’s assets and liabilities other than the
    Alibaba stake will be transferred to a new company, resulting in two separate

    • Yahoo Inc has said it scrapped a plan to
      spin off stake in Alibaba Group Holding Ltd, citing tax concerns, reported
      Reuters.

    • Yahoo’s assets and liabilities other than the
      Alibaba stake will be transferred to a new company, resulting in two separate
      publicly traded entities, Yahoo said.

    • The stock of the new company will be
      distributed pro-rata to Yahoo shareholders.

    • Yahoo, which has a market capitalization of
      about $35 billion, owes most of its valuation to its stakes in Alibaba and
      Yahoo Japan Corp.

    • The Alibaba stake alone is worth more than
      $30 billion.

    • “In addition to our efforts to
      increase value and diminish uncertainty for investors, the ultimate separation
      of our Alibaba stake will be important to our continued business
      transformation,” Chief Executive Marissa Mayer said in a statement.

    • The change in plans follows a Yahoo board
      meeting last week and pressure from activist investor Starboard Value LP, which
      said in a letter last month that the Alibaba spinoff carried too much risk and
      that the company should find a buyer for its Internet business, according to a
      Wall Street Journal report.

    • Yahoo Chairman Maynard Webb said the
      company believes the previous plan to spin off the Alibaba stake would have
      been tax free, but “we were concerned about the market’s perception of tax
      risk, which would have impaired the value” of the spinoff’s stock.

     

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