Boost for Yahoo as it spins off 15% stake in Alibaba, 'worth $39bn'
Yahoo is to spin off its 15 per cent stake in Alibaba, China’s leading e-commerce firm, into a separate company, avoiding any taxes on the transaction, chief executive Marissa Mayer has announced.
Yahoo alibaba stake: Worth $39 billion
Following the spin-off, Yahoo will continue to operate its core business and hold its 35.5 per cent interest in Yahoo Japan, the company said in a statement.
The decision was one which Wall Street had been waiting for "since Ms Mayer joined the company in 2012," said the New York Times.
"It cheered shareholders since they will directly reap all the remaining profit from Yahoo’s prescient investment, which cost virtually nothing a decade ago but is now worth about $39.5 billion," the NYT added.
The Alibaba stake makes up nearly 85 per cent of Yahoo’s market value.
Mayer said: “Today, along with our Board of Directors, I am proud and happy to announce a plan for a tax-free spin-off of our Alibaba holdings. Throughout my tenure with the company, we have worked tirelessly on a tax-efficient alternative that would maximize the value of our Alibaba investment for our shareholders. A tax-free spin off accomplishes this and delivers value directly and exclusivelyto our shareholders.”
Yahoo’s stock rose approximately six per cent in after-hours trading after the plan was revealed..