Starboard asked Yahoo in November to drop plans to spin off its stake in Alibaba due to the tax concerns, and urged the company to sell its core search and display advertising businesses instead.
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Yahoo, Inc.’s board of directors is planning a series of meetings this week to discuss its options regarding the future of the company, people familiar with the plans told The Wall Street Journal.
Marissa Mayer, who became the president and CEO of Yahoo in July, 2012, was brought in to turn around the financially-strapped company, but her efforts have not instilled much confidence in Wall Street.
NY hedge fund Starboard Value is seeking to gain board support for a plan to sell Yahoo’s websites, mobile applications, ad services and data analytics.
Yahoo’s board is understood to be mulling demands made by a n activist shareholder for Yahoo to offload its core services as an alternative to spinning off its lucrative 33 billion United States dollar (£22 billion) stake in Chinese ecommerce group Alibaba, which could land it with a tax bill of more than 10 billion USA dollars (£6.7 billion).
Yahoo is still to comment on the news.
Several potential suitors are emerging for Yahoo! The troubled engine giant has struggled in recent years to compete with the rise of Google and Facebook, and debate now rages as to whether turning its decline around is even possible.
Citing sources familiar with the matter, the publication had earlier reported that Yahoo Inc. It is important to state that shares of Yahoo Inc. have been in a strong downtrend since the beginning of the year and have underperformed the broader markets.
According to unnamed analysts, that business could attract interest from SoftBank Corp. Starboard attributes the relatively low price of the Internet business to poor management of the division by Mayer and the Yahoo management team.
The news comes as Yahoo’s board and chief executive Marissa Mayer faces growing pressure over the company’s performance. It added that Alibaba would consider buying its own shares back from Yahoo, only if they come at a steep discount.
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One potential barrier to a deal could be Yahoo’s 35% stake in Yahoo Japan and its 15% stake in China’s Alibaba Group.
