Yahoo! Inc. (NASDAQ: YHOO) is planning to sell its Asian assets, including bulk of its holdings in Alibaba Group of China, according to the Wall Street Journal.
Yahoo’s Board is considering a plan to significantly cut the company’s 40% stake in Alibaba Group and also sell its 35% ownership stake in Yahoo Japan, the Journal, citing people familiar with the matter, said. The sale of the Asian assets could fetch the Sunnyvale, California-based company $17 billion to $18 billion.
The sale of Asian assets would enable Yahoo to return some cash to shareholders. It would also allow the technology company to focus on turning around its core Internet advertising business.
The transaction will be reviewed by a Board Committee leading the strategic review for Yahoo. According to a person familiar with the matter, the Board Committee wants to know more before they can approve the sale.
Earlier this year, Yahoo ousted its CEO Carol Bartz and began a strategic review to enhance value for shareholders. The company has also been in discussions with private equity firms for a possible sale.
Alibaba and Softbank Corp., which is the largest shareholder in Yahoo Japan, had offered to acquire Yahoo’s stakes several months ago, however, discussions have gathered pace recently, people familiar with the matter said.
Yahoo’s Asian assets have significant value. Back in September, the company’s stake in Alibaba, which is China’s largest internet company, was valued at around $13 billion. The company had paid $1 billion to acquire the stake back in 2005. A spokeswoman for Yahoo did not respond to request for comments. Alibaba spokesman also declined to comment on the issue.
Yahoo shares, meanwhile, rose sharply on Wednesday. The stock ended the day 5.82% higher at $15.99 on above average volume of 47.13 million.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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