Yahoo! has closed the initial sale of its stake in Alibaba Group, valued at USD 7.6 billion. Net cash proceeds after taxes and fees total approximately USD 4.3 billion. Yahoo! announced the share repurchase agreement in May. Yahoo! plans to return around USD 3.65 billion in after-tax proceeds to shareholders, or 85 percent of the net cash proceeds from the initial sale of its shares in Alibaba. This amount includes the USD 646 million the company has already returned to shareholders, as well as an additional USD 3 billion.
After accretion from the Alibaba share repurchase, Yahoo! continues to own approximately 23 percent of Alibaba Group common stock, valued at USD 8.1 billion. Together with its preferred stock, the implied valuation of Yahoo!’s entire remaining stake is approximately USD 8.9 billion.
Yahoo! has now completed the first stage of the Alibaba share repurchase process. Under the terms of the agreement, the second phase allows for Yahoo! to monetize approximately half of its remaining stake at the time of an IPO of Alibaba at the IPO price. Lastly, after an IPO, Yahoo! has the right to sell its remaining shares following a customary lock-up period.
