As part of the buyback of Yahoo!’s 40% interest in it Alibaba may take all or part of itself private. The company has been rumored to be in talks to raise $3 billion.It has been assumed that this is to get Yahoo! stake in exchange for cash to bolster the portal’s balance sheet
One of Alibaba’s operating unit is its website, Alibaba.com. It is this Hong Kong listed entity which would go private according to rumors.
Under the plans being discussed, Alibaba Group would use bank loans and cash plus an asset swap to buy back about a 25 percent stake, leaving Yahoo holding 15 percent, the sources said. The U.S. group’s 40 percent holding is worth an estimated $13-$14 billion, based on recent deal valuations.
Alibaba Group, one of the three leading players in the world’s biggest Internet market, plans to pay a third of the consideration through a stake in one of its operating assets – making a deal tax-free for Yahoo – and the rest, around $6 billion, in cash, the sources said. It is looking to raise a loan of about $3 billion to help fund the deal.
The sources said taking Alibaba.com private was just one of the proposals being discussed, and was not a pre-condition of any Yahoo deal. Any final agreement could be several weeks away, they added.
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