Yahoo! has abandoned the plan to spin off its stake in Alibaba Group into a separate company. Instead it will look at a reverse of the plan, separating its other activities into a new company. The Alibaba spin-off, originally planned for January 2016, hit a stumbling block when US authorities said they could not say whether the transaction could take place completely tax-free for Yahoo shareholders.
In the reverse spin-off, Yahoo’s assets and liabilities other than the Alibaba stake would be transferred to a newly formed company, the stock of which would be distributed pro rata to Yahoo shareholders. This would result in two separate publicly-traded companies. Yahoo said the plan could take a year or more to realise, as it secures the necessary regulatory and shareholder approvals and prepares the required documentation.
On the rest of Yahoo's strategy, CEO Marissa Mayer said the company will "tighten our focus and prioritize investments to drive profitability and long-term growth" in 2016. The separation of the Alibaba stake is expected provide more transparency into the value of Yahoo’s other business, she said.
