MUMBAI: China‘s e-commerce major Alibaba Group is in talks with Yahoo to buy back 15 to 25 per cent of its shares it had sold to the Internet media major in 2005.
Numerous discussions have been held in recent years for Alibaba to reclaim some or all of the 40 per cent stake in the company, according to Reuters.
The two companies have been in talks for a month. However, the final outcome is dicey as a $17 billion tax-free asset swap between the two companies fell apart in February.
The new deal, which is designed to eliminate complexities, would not be tax-free and would be much more straightforward, the report adds.
"The overall complexity of this deal is much simpler. There‘s no IRS risk, there‘s no complications with regards to the identification of assets," the person said. In a best case scenario, a deal could be weeks away, the person said.
Yahoo CEO Scott Thompson had during first-quarter earnings conference call with analysts said that the two companies were working on a "simplified" transaction to "monetise" a portion of Yahoo‘s stake in Alibaba.
Alibaba would raise capital to fund the stock buy back.
In September, Alibaba was valued at $32 billion when Silver Lake and other firms invested in the company. At that valuation, Yahoo could make $4.8 billion to $8 billion by selling 15 to 25 per cent of Alibaba.
