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07 December 2023

Chinese firm to buy back Yahoo stake

By Agencies


Chinese e-commerce firm Alibaba is in advanced talks with investors to buy out the 39-per-cent stake held by Yahoo to help ensure future independence, the Wall Street Journal reported on Wednesday.


The plan is aimed at increasing Alibaba's management independence if software giant Microsoft acquires Yahoo and as a result also obtains the large stake in Alibaba, the newspaper said, citing unnamed sources.


Alibaba executives are concerned that Microsoft's size and history of hands-on management could jeopardise its autonomy and its image as a Chinese company, it said.


Yahoo rejected Microsoft's takeover bid last month, saying the $44.6-billion offer is too low but Microsoft urged the veteran Internet company Yahoo to reconsider its blockbuster bid.


If Microsoft's bid goes through, Alibaba aims to exercise a clause in its 2005 deal with Yahoo that would let it buy the Yahoo stake, using financing from two lead investors and a group of others, including large Chinese institutions, the sources told the newspaper.


In August 2005, Yahoo invested one billion dollars for a 39 per cent stake in Alibaba, which also agreed to run the Chinese operations of the US Internet giant.


A Hong Kong-based spokesperson with Alibaba was not immediately available for comment. (AFP)