Yahoo Asian assets sale unravels

2012-02-15 17:26

kalahari.com

San Francisco - As Yahoo tries to head in a new direction, the fate of the struggling internet company's Asian holdings remains in limbo.

The negotiations to sell Yahoo's stakes in China's Alibaba Group and Yahoo Japan abruptly broke off in a disagreement over the sales price and the best way to get the complex deal done, according to a person familiar with the matter.

Another person familiar with talks said Yahoo had second thoughts after agreeing to the sales price in a 300-page proposal outlining the proposed deal in late December.

"It was the culmination of a lot of little items," one person said of the deal's collapse.

Both people spoke to The Associated Press on Tuesday on the condition of anonymity because the negotiations are considered to be confidential, despite repeated leaks about the discussions during the past few months.

Turnaround

All Things D, a technology blog affiliated with The Wall Street Journal, reported earlier that the talks had unravelled.

It's the latest twist in the drama that has been swirling around Yahoo since it fired Carol Bartz as CEO five months ago.

Since the start of the year, Yahoo has hired former PayPal executive Scott Thompson as CEO and announced the departures of five board members, including chair Roy Bostock and company co-founder Jerry Yang.

One of Yahoo's major shareholders, New York hedge fund manager Daniel Loeb, outlined plans on Tuesday to shake things up even more; he intends to wage a campaign to win a board seat for himself and three of his allies.

Thompson, Yahoo's fourth full-time CEO in less than five years, has pledged to engineer a turnaround that eluded his predecessors.

For now, though, investors are disillusioned with Yahoo's inability to close the deal on the Asian assets. The company's shares shed 76c, or 4.7%, to close at $15.36 - below their price six weeks ago when Yahoo announced Thompson's hiring.

The Asian impasse comes as a surprise, given that Yahoo and the prospective buyers, Alibaba and Yahoo Japan shareholder Softbank Corp, all seemed motivated to seal a long-awaited deal. Yahoo was confident enough to dispatch negotiators to Hong Kong last week while Alibaba had been seeking financing to pay for its part, one person said.

Taxes

But the sides couldn't agree on the value of Yahoo's holdings, which have been steadily rising in the past few years as Alibaba's electronic-commerce services prospered in China's rapidly growing internet market. Analysts have also differed on how much Yahoo could fetch by selling its stakes, with estimates ranging from $11bn to $18bn.

To compound the challenges, the deal was arranged in a way that would have enabled Yahoo to avoid paying taxes.

That proposal, according to both people who spoke to the AP, was structured a "cash-rich split-off" that would have resulted in Alibaba and Softbank contributing money and other assets into a special entity in exchange for Yahoo's stakes in the Asian companies.

Yahoo then could have used the money generated from the Asian sale to placate its long-frustrated shareholders with a special dividend or other measures that might reverse a three-year slump in its net revenue.

The downturn has turned Yahoo's Asian stakes into the most valuable part of the company, even though its own operations still include websites boasting an audience of about 700 million people.

But Yahoo is having trouble attracting the advertisers who have been spending more money on the internet in recent years, a trend that has been enriching online search leader Google and Facebook, the owner of the largest online social network.

Yahoo remains open to reviving the negotiations to sell its Asian assets at the right price, one of the people familiar with the matter said. That could include a new proposal that would taxable in the US, the other person said.

- SAPA

Read more on:    yahoo  |  internet
NEXT ON NEWS24X

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
 
Traffic
Lottery
 
  • Wednesday Sir Lowry's Pass - 17:57 PM
    Road name: Old Sir Lowrys Pass Road
    TRAFFIC LIGHTS not working at Bezweni Road
  • Wednesday Cape Town - 17:56 PM
    Road name: Buitengracht Street
    TRAFFIC LIGHTS not working at Riebeeck Street
 
More traffic reports...
 

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Escape winter, head to Mauritius

Escape winter by spending 7 nights in Mauritius' tropical bliss from R13 215 per person sharing. Includes return flights, airport transfers and accommodation. Book now!

Kalahari.com - shop online today

Get many eggs in one basket!

Gaming bundles: 2 Super Hits games for R99, 3 Disney games for R99 and more + exclusive accessory bundles only available on kalahari.com. While stocks last. Shop now!

25% off bestselling books!

The Real Meal Revolution by Tim Noakes, Jeffrey Archer’s Be Careful What You Wish for, Man’s Search for Meaning by Victor E. Frank and many more titles. Shop now!

Up to 25% off electronics

Buy top electronics and save up to 25%. Such as kalahari.com’s 1# selling product the gobii eReader, Patriot X Porter flash drive, Asus Nexus 7” 3G tablet, Samsung Galaxy SIII, Lenovo G580 Notebook and many more. Shop now!

DStv HD PVR Decoder now R949

The DStv HD PVR Decoder has further revolutionised the television experience with lifelike viewing, sharper images, more vibrant colours and precision picture quality. Now R949, save R550. Offer valid while stocks last. Shop now!

Up to 30% off appliances & homeware

Save up to 30% on appliances and homeware this Easter! Offer valid while stocks last. Shop now.

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Samsung Galaxy Note 16GB

GALAXY Note combines the market's largest HD Super AMOLED display,...

From R3899.00

I'm shopping for:

Horoscopes
Aquarius
Aquarius

You may find yourself fascinated by something which could draw you in to obsessively exploring this subject in depth....read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.