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.
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)