Yahoo to Spin Off Alibaba Stake Into New Company

Yahoo to Spin Off Alibaba Stake Into New Company
Image credit: Alibaba.com
1 min read
This story originally appeared on Reuters

 

Yahoo Inc unveiled a plan for a tax-free spin-off of its 15 percent stake in China's Alibaba Group Holding Ltd, responding to pressure to distribute to shareholders its prized investment valued at roughly $40 billion.

Shares of Yahoo were up roughly 7 percent at $51.45 in after-hours trading on Tuesday.

Yahoo said on Tuesday that its management has recommended to its board of directors a plan that would spin off the stake into a newly formed independent registered investment company. The stock of the company will be distributed pro-rata to Yahoo shareholders.

The new entity will include Yahoo's 384 million shares in Alibaba as well as an unspecified "legacy, ancillary" Yahoo business, the company said.

Yahoo, which is trying to reverse a multi-year decline in revenue, has faced increasing investor pressure more than two years after Chief Executive Marissa Mayer took the reins to lead a comeback plan.

(Reporting by Alexei Oreskovic; Editing by Christian Plumb)

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