updated 08:19 pm EDT, Wed September 12, 2012
Half of 40 percent share in Chinese internet company at stake
According to sources familiar with the matter, Yahoo is finishing the details to offload half of its assets in China's Alibaba Group by September 20. The $7.6 billion-dollar deal announcement is rumored to be set for September 18, with Alibaba paying Yahoo for half of the 40 percent of the Chinese internet company it owns.
Yahoo co-founder Jerry Yang spearheaded the $1 billion investment in Alibaba seven years ago. Since then, Alibaba co-founder Jack Ma has attempted to reduce Yahoo's share in the company. Yahoo agreed in principle earlier this year to sell half of its stake in the company, initially promising to return the money to the shareholders of Yahoo with a stock buyback program.
After Marissa Mayer took the reins of the former search engine giant, Yahoo filed a statement declaring that they were re-examining the stock buyback plan, and were potentially keeping the funds for strategic acquisitions.
To fund the partial divestiture of Yahoo's share in the company, Alibaba is acquiring nearly $8 billion, both in debt and in sale of stock, involving "a lot of money flying around the world to complete this," according to one person involved with the situation. Neither Yahoo nor Alibaba has commented on the matter.