Home / Channel / Yahoo sell Alibaba stake for $7.1B

Yahoo sell Alibaba stake for $7.1B

Yahoo have decided to sell half of its stake in Chinese e-commerce group Alibaba for $7.1 billion. Most of the cash from this sale is going to shareholders.

Struggling Yahoo have sold half of their percentage stake back to the Alibaba Group for $6.3 billion cash and up to $800 million of Alibaba preference shares. Yahoo have been trying to sell this stake now for some time in the efforts to raise to turnaround their business. They can give money now to unhappy shareholders, who are still upset over a chance to sell to Microsoft Corp in May 2008 for $47.5 billion. Since then Yahoo stock has struggling, dropping from $33 per share to $15.42 last week.

Yahoo issued a joint statement with Alibaba saying that they plan to return ‘substantially all’ of the after tax cash proceeds to shareholders. Interim Yahoo CEO Ross Levinsohn said that the stake sale provides ‘clarity’ for Yahoo shareholders. Previous CEO Scott Thompson was removed from his position after his official biography included a college degree that he never received.

Their deal highlights that if Alibaba Group go public at a future date, then they have to buy back another 10 percent stake from Yahoo or let Yahoo sell those shares in the IPO.

Alibaba CEO and Chairman Jack Ma said that the deal delivers a “balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future.”

Japan’s Softbank and Yahoo will hold 50 percent of Alibaba after the deal is finalised. These two companies have however said they will cap their collective shareholder voting rights at less than 50 percent, according to the blog post on Alibaba’s in house new site, Alizila.

Source: Kevin Chan AP

Become a Patron!

Check Also

James Mods: Electroplating At Home (How To Guide!)

At the KitGuru modding workshop today, we delve into the ins and outs of DIY electroplating and show you how you can jazz up your components for very little cost, using many of the things you may already have around the house...