Yahoo! Shelves Spin-off Plans
CBJ — Yahoo has shelved plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding Ltd, citing tax concerns, and will instead create a separate company to hold the rest of its assets.
The new publicly-traded company will house Yahoo’s Internet business and its 35% stake in Yahoo Japan, giving investors a clearer view of the company’s core business.
It’s believed the plan could take more than a year to complete and adds further doubt as to CEO Marissa Mayer’s ability to turnaround the struggling company.
Yahoo had intended to spin off its $30 billion Alibaba stake by the end of this year or very early in the New Year at the latest, however, investors, lacking assurance from the U.S. Internal Revenue Service, are concerned that a spin-off could cost shareholders billions in taxes.
Yahoo owes almost all of its $35 billion market cap valuation to its 15% stake in Alibaba and its holding in Yahoo Japan.