Yahoo examines options for exiting Japanese business – report
Yahoo is close to unloading its 35% stake in Yahoo Japan and it is thought that a sale could happen relatively quickly, potentially simplifying decisions about the US firm’s wider prospects.
Yahoo Japan, in which Softbank Holdings has a 40% interest, has a total market value of about $19 billion and net cash of $2 billion, The Financial Times reported. Goldman Sachs and Allen & Co. are advising Yahoo on its overall options, but other parties, including UBS are looking into how the company could exit its Japanese business.
Given the tax implications of a sale, a Softbank or management purchase are reportedly more likely than US investors coming in for the stake.
Yahoo's future is uncertain following the sacking of CEO Carol Bartz, with the board thought to be considering the sale of all or part of the company. Private equity players have indicated that they would only consider making an offer for the company if the Asian assets - Yahoo Japan stake plus a 40% holding in China's Alibaba Group - were sold, creating a smaller and simpler acquisition.
Days after Silver Lake reportedly contacted Yahoo as one of several potential buyers, the private equity firm announced an investment in Alibaba alongside DST Global, Chinese PE house Yunfeng Capital, which was set up by Alibaba founder Jack Ma, and Temasek Holdings, an existing investor in the Chinese firm. The transaction, structured as a tender offer to employee shareholders and option holders as well as certain other shareholders, is said to be worth up to $1.6 billion. It values Yahoo's holding in Alibaba at nearly $13 billion.
Sources told AVCJ that there was no connection between the two situations because Alibaba's negotiations with Silver Lake predate Bartz's departure from Yahoo.
Ma subsequently said that he is interested in buying Yahoo and has held discussions with other potential buyers about options. Softbank and Yahoo invested in Alibaba in 2005, with the latter taking a 40% stake in exchange for $1 billion and control of its China-based assets.
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