Yahoo shelves plan to spin off Alibaba stake

Yahoo has shelved plans to spin off its stake in Chinese e-commerce giant Alibaba, 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 per cent stake in Yahoo Japan, giving investors a clearer view of the company’s core business.

The plan may take a year or more to conclude.

Yahoo had intended to spin off its Alibaba stake, worth more than $30 billion, by January.

But investors, lacking assurance from the US Internal Revenue Service, were worried that a spinoff could cost shareholders billions in taxes.

Yahoo, which has a market capitalisation of about $35 billion, owes almost all of its valuation to its 15 per cent stake in Alibaba and its holding in Yahoo Japan.

– (Reuters)