ADVFN - Advanced Financial Network.
HOME» NASDAQ » Y » YHOO Stock Price » YHOO Stock News

Yahoo! Inc. Share News

 Yahoo! Inc. (mm) Stock Price
YHOO Stock Price
 Yahoo! Inc. (mm) Stock Chart
YHOO Stock Chart
 Yahoo! Inc. (mm) Stock News
YHOO Stock News
 Yahoo! Inc. (mm) Company Information
YHOO Company Information
 Yahoo! Inc. (mm) Stock Trades
YHOO Stock Trades

Yahoo To Return 'Substantially All' Alibaba Proceeds To Shareholders

By Shara Tibken Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Yahoo Inc. (YHOO) plans to return substantially all proceeds from its agreement with Alibaba Group Holding Ltd. to shareholders and said the deal value could be higher than the original $7.1 billion estimate. The deal, struck late Sunday, resolves a tumultuous seven-year relationship between Yahoo and the Chinsese e-commerce company. Yahoo will sell up to half of its 40% stake in Alibaba for $7.1 billion, including $6.3 billion in cash and about $800 million in Alibaba preferred stock. The deal would net Yahoo $4.2 billion after taxes, Chief Financial Officer Tim Morse said Monday during a conference call. The company plans to return "substantially all" of that to shareholders, he said. The $7.1 billion price stems from a $35 billion valuation for Alibaba based on new equity raised to finance the transaction. However, Morse said there are incentives in place to encourage a higher valuation. If Alibaba is valued at $40 billion, Yahoo will still receive $7.1 billion, but Yahoo would receive $7.6 billion for a $45 billion value or $8.1 billion for a $50 billion value. "The valuation of this initial repurchase, we want to keep re-emphasizing that it's TBD," Morse said. "We have a floor, but we have an incentive structure to drive as high as possible above that floor." Yahoo shares, down 5% over the past 12 months, slipped about 1% to $15.31 in recent trading. For years, Wall Street analysts have said that much of the value of Yahoo's stock comes from its ownership stakes in Alibaba and Yahoo Japan, creating valuation and turnaround challenges for management. At the same time, some Yahoo investors have worried that selling the Asian assets entirely would cut off any potential gains Yahoo would get from an expected public offering of Alibaba. With the current deal, Yahoo simplifies its business, bolsters its share value through the buyback, and still gives investors the opportunity to participate in Alibaba's growth. Morse on Monday said Yahoo will return "substantially all" of its cash proceeds to shareholders, though the company hasn't yet determined the form or timing for such action. Yahoo already said it increased its share buyback plan by $5 billion as part of the transaction. Stifel Nicolaus analyst Jordan Rohan said the agreement does have some drawbacks, such as not being tax efficient, but the share repurchase is "massive enough" that Yahoo shareholders should benefit "meaningfully" in the short term. And a path to an IPO for Alibaba could drive additional upside in the longer term. Alibaba, meanwhile, is expected to fund the deal through a combination of cash on hand, new and existing debt facilities, a new equity raise and the issuance of a new class of preferred stock to Yahoo. If Alibaba repurchases less than 15 points of Yahoo's stake, the level of preferred stock given to Yahoo would be reduced to zero, Morse said. And Alibaba can choose to pay cash instead of issuing preferred shares, he said. Alibaba will issue at least $2 billion in equity to nonaffiliated third parties, Morse said. And Alibaba must pay a higher price to Yahoo if it raises $500 million or more in equity within a designated period of time post-close, he said. Of the remaining 20% stake owned by Yahoo, Alibaba would have the right to buy as much as 10% from Yahoo at the share price of a potential public offering of the Chinese Internet giant, or allow Yahoo to sell those shares in an IPO. Although Alibaba doesn't have current plans to go public, the right to buy back the additional 10% expires in December 2015, providing an incentive to list before then. Morse said Yahoo will have input and influence on the selection of underwriters for an IPO. Yahoo can choose to hold on to the last 10% of its stake or sell it to Alibaba at the market price of Alibaba after it becomes a publicly traded company, the companies said. Morse on Monday said there are no requirements in place for when Yahoo would have to sell the shares on the public market, allowing it to choose a time that's most beneficial to Yahoo. Yahoo paid $1 billion for its 40% stake in Alibaba in 2005, when the Chinese company was a fledgling. -By Shara Tibken, Dow Jones Newswires; 212-416-2189; --Anupreeta Das contributed to this article.

Stock News for Yahoo! Inc. (YHOO)
02/16/201708:11:00CMO Today: 21st Century Fox Faces Federal Probe
02/16/201703:02:00Verizon Pares Price Of Yahoo Acquisition -- WSJ
02/15/201713:01:00Verizon, Yahoo Near Revised Deal That Cuts Price -- Update
02/15/201712:12:00Verizon, Yahoo Near Revised Deal That Cuts Price of Tech Firm...
02/14/201711:03:43Statement of Ownership (sc 13g)
02/13/201717:17:53Statement of Changes in Beneficial Ownership (4)
02/11/201700:24:00Senators Question Yahoo's Candor on Data Breach
02/10/201714:14:13Amended Statement of Ownership (sc 13g/a)
02/08/201717:20:14Statement of Changes in Beneficial Ownership (4)
02/08/201717:18:33Statement of Changes in Beneficial Ownership (4)
02/08/201717:17:15Statement of Changes in Beneficial Ownership (4)
02/08/201717:13:17Statement of Changes in Beneficial Ownership (4)
02/07/201709:01:00Owner of Cannes Lions Ad Festival to Acquire MediaLink Consulting...
02/03/201717:22:57Statement of Changes in Beneficial Ownership (4)
01/31/201717:23:51Statement of Changes in Beneficial Ownership (4)
01/31/201717:15:25Statement of Changes in Beneficial Ownership (4)
01/31/201717:14:08Statement of Changes in Beneficial Ownership (4)
01/31/201717:12:24Statement of Changes in Beneficial Ownership (4)
01/26/201716:33:20Amended Statement of Ownership (sc 13g/a)
01/26/201712:05:00Verizon Exploring Combination With Cable Firm Charter Communications...

Yahoo! Inc. and other NASDAQ stock quotes are delayed by at least 20 minutes.
All other stock price and quote data is delayed by at least 15 minutes unless otherwise stated. By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Contact Us | Copyright 1999-2016 ADVFN PLC. | Privacy Policy | Investment Warning | Data accreditations | Investor Relations