Here we go again.
Shares of Yahoo! fell after sources close to the company said it is leaning towards selling its Asian assets and distributing the proceeds to shareholders rather than seeking a buyer for the entire company. In this scenario, sources say the company would eventually pay a special dividend or buy back shares with the proceeds of the sale. This follows a Wall Street Journal report that indicated the company was looking for a way to dispose of its Asian assets in a tax efficient manner.
According to the report, the plan would involve creating a new subsidiary into which Alibaba, 40% of which is owned by Yahoo!, would put cash and some assets. The stock of that company would be swapped for Yahoo!’s stake, leaving Yahoo! with the cash and assets and giving Alibaba its shares back, a transaction which would not be considered a sale in the U.S. and therefore not taxable.
If Yahoo! was to change ownership, it could threaten the tax efficiency of this transaction, according to some sources. Alibaba Chairman Jack Ma has publicly expressed interest in purchasing Yahoo!, primarily for its stake in Alibaba. Additionally, other parties, including Google (GOOG), Microsoft (MSFT) and several private equity firms have been linked to a purchase of Yahoo!, though no formal offers have been made.
Yahoo! (YHOO : NASDAQ : US$15.64), Net Change: -0.92, % Change: -5.56%, Volume: 39,494,547
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