Serena Saitto and Brian Womack Alibaba has been trying to buy back the stake for more than a yearand stepped up efforts in September, when the U.S. company firedthen-Chief Executive Officer Carol Bartz. Reducing the stakereduces Yahoo s presence in China, the world s largest Internetmarket, and makes a takeover of the U.S. company more likely, saidJordan Rohan, an analyst at Stifel Nicolaus & Co.
For Yahoo shareholders, the sale and subsequent march towards anIPO is a clear positive, as many questioned whether Yahoo would beable to monetize its China assets at all, Rohan said in aresearch report. The capital required to take Yahoo private isreduced with each Alibaba monetization event. Yahoo has come close to selling the stake in the past and failedand a deal may be postponed, the person said. Yahoo currently ownsa 40 percent stake in Alibaba so the current proposal underdiscussion would cut that holding in half.
Alibaba is not committed to any specific timing on an IPO, whichwill depend on market conditions, the person said. Bartz Struggled The companies struggled to make headway on negotiations underBartz, who failed to reach an agreement to let Alibaba Group buyback shares in 2010. Yahoo acquired the stake in 2005 in exchangefor $1 billion and ownership of Yahoo s Chinese unit. Fissures became public by January 2010 when Alibaba Group describedas reckless Yahoo s support for Google (GOOG) Inc., whichtangled with Chinese authorities over the nation s Web- censorshiprules. Color HDMI Cable
In May of last year, Yahoo s rift with Alibaba widened after theWeb portal said the Chinese company spun off its online paymentbusiness without informing shareholders. Yahoo said it wasn tconsulted about the transfer of the Alipay unit to a company mostlyowned by Jack Ma, chief executive officer of Alibaba Group. Yahoo had a board meeting to review the transaction and willconsider a dividend payment, AllThingsD reported May 17. Thewebsite said the deal is likely to value the portion of Yahoo sholdings at about $7 billion, or 20 percent of Alibaba s $35billion enterprise valuation. Package
After a potential IPO, Yahoo couldsell more of its stake, AllThingsD reported. Active Discussions Dana Lengkeek, a spokeswoman for Yahoo, and John Spelich, aspokesman for Alibaba, declined to comment. Yahoo, which failed to keep pace with growth at Google and FacebookInc., is pursuing active discussions with the Chinese company,Scott Thompson, who succeeded Bartz before stepping down thismonth, said in April. Yahoo had also been in discussions about selling its stake inYahoo! Japan to Tokyo-based Softbank Corp. (9984), another personsaid. 3D Ready HDMI Cable
Those talks have gone cold over price and have not resumed,said the person. Yahoo considered a deal with Alibaba and Softbank that would cutits stake in Alibaba to about 15 percent from about 40 percent, aperson familiar with the matter said in December. The shares of Sunnyvale, California-based Yahoo rose 3.7 percent to$15.42 at the close in New York on May 18. The shares have fallen4.4 percent this year.
Yahoo, which spurned a $47.5 billion offer by Microsoft Corp. in2008, has a market value of $18.8 billion. By comparison, Google isvalued at $195.6 billion.