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Yahoo plans to spin off Alibaba stake to Aabaco Holdings

US regulators
have been formally notified by Yahoo that it is spinning off its stake in
Chinese e-commerce giant Alibaba to a new independent company called Aabaco
Holdings.

US regulators
have been formally notified by Yahoo that it is spinning off its stake in
Chinese e-commerce giant Alibaba to a new independent company called Aabaco
Holdings.

According to a filing with the US Securities and Exchange Commission, Aabaco
will wind up owning approximately 384 million shares of Alibaba Group,
representing an interest of about 15%. The move was designed to sidestep taxes
and appease investors eager to tap into Yahoo’s multi-billion-dollar stake in
Alibaba, reports the Times of India.

It could be a
chance for Yahoo CEO Marissa Mayer to show she can lead the company
to renewed glory. Yahoo was awaiting a ruling by the US Internal Revenue
Service about what portion of the transaction will be tax-free. Yahoo warned in
the filing that there could be tax implications.

Under the spinoff plan announced early this year, all outstanding shares of
Aabaco will be distributed to Yahoo stock holders, the company said in the
filing.

The California-based Internet Company will also transfer to Aabaco services for
small businesses that it hosts in its Internet cloud.

Yahoo bought a 40% stake in the Chinese company in 2005 for $1 billion. The current
stake of some 15% is worth more than $30 billion based on the Friday’s share
price of the Chinese e-commerce giant.

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