DHAKA: Alibaba Group Holding Ltd. is near an agreement to buy back a 20 percent stake in itself from Yahoo! Inc. (YHOO) for about $7 billion and may announce a deal as soon as Sunday, said a person with knowledge of the matter.
The purchase may pave the way for Alibaba, China’s largest e-commerce provider, to pursue an initial public offering in the next 18 months, said the person, who asked not to be identified because the matter is private.
Alibaba, helped by shareholders Temasek Holdings Pte., Digital Sky Technologies, Silver Lake, plans to finance the purchase with cash and debt, the person said.
Alibaba has been trying to buy back the stake in itself for more than a year and stepped up efforts in September, when the US company fired former chief executive officer Carol Bartz.
Reducing the Alibaba stake lessens Yahoo’s toehold in China, the world’s largest Internet market, while also making a takeover of the US company more likely, said Jordan Rohan, an analyst at Stifel Nicolaus & Co.
‘For Yahoo shareholders, the sale and subsequent march towards an IPO is a clear positive, as many questioned whether Yahoo would be able to monetize its China assets at all’, Rohan said in a research report.
‘In addition, the capital required to take Yahoo private is reduced with each Alibaba monetization event.’
BDST: 1854 HRS, May 20, 2012
Edited by Robab Rosan, Cultural Affairs Editor
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