Media

Yahoo shelves plan to spin off Alibaba stake

Internet giant will instead create separate company to hold the rest of its assets

The new publicly traded company will house Yahoo’s internet business and its 35 per cent stake in Yahoo Japan. Photograph: Karen Bleier/AFP/Getty Images
The new publicly traded company will house Yahoo’s internet business and its 35 per cent stake in Yahoo Japan. Photograph: Karen Bleier/AFP/Getty Images
Wed Dec 09 2015 - 20:31

Yahoo has shelved plans to spin off its stake in Chinese e-commerce giant Alibaba, citing tax concerns, and will instead create a separate company to hold the rest of its assets.

The new publicly traded company will house Yahoo’s internet business and its 35 per cent stake in Yahoo Japan, giving investors a clearer view of the company’s core business.

The plan may take a year or more to conclude.

Yahoo had intended to spin off its Alibaba stake, worth more than $30 billion, by January.

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But investors, lacking assurance from the US Internal Revenue Service, were worried that a spinoff could cost shareholders billions in taxes.

Yahoo, which has a market capitalisation of about $35 billion, owes almost all of its valuation to its 15 per cent stake in Alibaba and its holding in Yahoo Japan.

– (Reuters)