Yahoo stops spinoff

Yahoo has announced they will not move forward with a spinoff of its stake in Alibaba. They have said that instead they will examine a deal involving its core business. This was reported by CNBC on Tuesday.
This move comes at an uncertain time over whether the spinoff of its 384 million-share stake would be taxed.  The issue comes because it is wondered if it would reduce the risk of a significant tax payment for a transaction meant to create value if they sell.

Apparently the IRS told Yahoo earlier this year that it would not rule on whether the company could avoid this tax hit if its stake in a separate entity, which it planned to name Aabaco.

An announcement from the company could come as soon as Wednesday. Yahoo’s assessment of its core business, as well as its Yahoo Japan stake, could take a year or more, sources said.

Shares of Yahoo were up more than 2 percent in extended trading Tuesday.

You May Also Like