Yahoo files for a spinoff of the Chinese e-commerce giant, Alibaba, and shares its big plans for shareholders. The name selected for the new public company is Aabaco Holdings Inc, Yahoo said.
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The spinoff, announced in January, is intended to transfer the value of that stock to Yahoo’s shareholders without incurring the capital gains tax of more than US$10 billion that would be due if Yahoo simply sold the stock and returned the cash to its shareholders. Yahoo is headquartered in Sunnyvale, California, and has offices located throughout the Americas, Asia Pacific (APAC) and the Europe, Middle East and Africa (EMEA) regions.
Key to the plan is Yahoo’s intention to include its small-business services division in the spinoff, which will be called Aabaco Holdings.
Yahoo Inc! announced the initial filing with the SEC after completing Form N-2 under the Investment Company Act of 1940, the company said in a statement.
Yahoo originally invested in Alibaba in 2005, spending $1bn on a 40 per cent stake in the process.
Basically, Yahoo is tossing its Alibaba stock and a minor part of its operations into a new corporate entity.
It also offers a chance for Mayer to show she can lead the company to new heights.
Yahoo was awaiting a ruling by the US Internal Revenue Service about what portion of the transaction might be tax-free. However, the Yahoo chief has sought to appease investors and reassure them that a tax-free spin-off will go along as planned, and Wall Street seems cautiously pleased for now, with Yahoo shares rising 1.98 percent to $39.68 in after-hours trading following the filing.
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Friday’s filing does not specify a date for the spin-off.
