Yahoo in talks to sell 15%-25% of Alibaba

  • Business
  • Monday, 07 May 2012

SAN FRANCISCO: Yahoo Inc could be weeks away from selling 15% to 25% of Alibaba Group's stock back to China's largest ecommerce company, in a deal designed to eliminate complexities that had scuttled the parties' previous negotiations, a source said.

The two companies had been in talks for a month, the person said, but cautioned that there was no guarantee a deal would be reached.

Numerous discussions have been held in recent years about a deal for Alibaba to reclaim some or all of the 40% stake in the company that Yahoo acquired in 2005.

A US$17bil tax-free asset swap between the two companies fell apart in February.

The latest deal would not be tax-free and would be much more straight forward, the person told Reuters on Friday.

“The overall complexity of this deal is much simpler. There's no IRS risk, there's no complications with regards to the identification of assets,” the person said. In a best case scenario, a deal could be weeks away, the person said.

In September, Alibaba was valued at US$32bil when Silver Lake and other firms invested in the company, according to media reports at the time.

At that valuation, Yahoo could make US$4.8bil to US$8bil by selling 15% to 25% of Alibaba. - Reuters

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