All data is delayed
Loading...
See More

Yahoo to sell half of Alibaba stake

May 21 2012 08:58
AFP

Hong Kong - Yahoo has agreed to sell half of its 40% stake in Chinese e-commerce group Alibaba for about $7.1bn, and the struggling US internet company said it would return most of the cash to shareholders.

The deal, announced Sunday in the US, will see Alibaba Group buying back the stake from Yahoo for $6.3bn cash and up to $800m of Alibaba preference shares.

The announcement caps at least a year of on-and-off talks as Yahoo tried to sell its stake. Money from the sale will help Yahoo appease its shareholders by giving it the financial firepower to return cash.

Yahoo said a joint statement with Alibaba that it plans to return "substantially all" of the after-tax cash proceeds to shareholders.

It said its share buyback programme had been increased by $5bn though a final decision on how to return the cash to shareholders had not been made.

The two companies also have an agreement for Yahoo to sell the remainder of its Alibaba stake in stages later on.

Yahoo's interim CEO Ross Levinsohn said the deal provides "clarity" for Yahoo shareholders.

The statement also indicates Alibaba may hold an initial public offering in the future.

A person with knowledge of the deal said there are incentives built into the transaction that would make it attractive for Alibaba Group to hold an IPO by the end of 2015.

Alibaba Chairperson and CEO Jack Ma said the deal establishes a "balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future."

yahoo

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.
 

Company Snapshot

We're talking about:

THE DEBT ISSUE

Debt is one of the biggest financial issues facing South Africans today. Find out how you can avoid and manage your debt with Fin24 and Debt Rescue.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Labour’s call for a cap on salary of high earners is?

Previous results · Suggest a vote

Loading...