I haven’t written for a while about Alibaba’s endless quest to buy back the 40 percent of its shares held by faded US search giant Yahoo (Nasdaq: YHOO), so now seems like a good time to revisit the subject yet again following reports that China’s e-commerce leader is near finalizing a $3 billion bank loan it will need to complete the buy-back. (English article) Of course the main problem with this deal has never been the financing, though news of this loan could mean a deal may be near for this tortured buy-out that began with the firing of former Yahoo CEO Carol Bartz last September and has now dragged on for 8 months. According to the latest reports, Alibaba expects to finalize the loan by the end of this month, which will be a syndicated deal involving a large number of mostly foreign banks including Credit Suisse (Switzerland: CSGN) and Morgan Stanley (NYSE: MS). Both Alibaba and Yahoo have shown that they want to complete a deal, so clearly there’s determination on both sides. Alibaba wants to reclaim the stake so it can sell it to other investors in the run-up to an eventual IPO, while Yahoo wants to get rid of a stake it considers a valuable but unneeded distraction as it struggles to turn around its core US-based search business. Neither company has commented on the major stumbling blocks that have kept them from signing a deal, but based on what I’ve seen the major obstacle seems to be unrealistic expectations from both sides, including Yahoo’s desire to structure the deal in a way that will allow it to avoid paying taxes on the $10 billion or more in gains it will make through the sale. Reports in early February indicated the 2 sides were restarting discussions for the buy-out with more realistic expectations, after a previous round of talks faltered and stalled out late last year. (previous post) Neither side has commented since then, but this latest news that Alibaba is close to finalizing the $3 billion loan may indicate that the deal is finally moving forward and we could actually see an announcement in the next 2-3 weeks. Of course, hopes were high for a deal to be finalized last year after Yahoo’s big leadership change, even though those talks eventually failed, leaving everyone in limbo. The big difference this time is that new Yahoo CEO Scott Thompson has been in his job for 5 months now, during which time he has started his overhaul plan which included announcement of mass layoffs. The Alibaba stake clearly has no part in Thompson’s future vision for Yahoo, and thus he probably feels that now would be a good time to get rid of this distraction. Accordingly, he will be willing to make compromises, most likely with strong backing from the Yahoo board, to finally reach a deal. Personally speaking, I can’t wait for that day to come so this troubled marriage can finally end in divorce and both Alibaba and Yahoo can move on to more important matters.
Bottom line: Word that Alibaba is close to finalizing a $3 billion loan to buy back the 40 percent of its shares held by Yahoo indicates a deal in this drawn-out process may finally be near.
Related postings 相关文章:
◙ Alibaba: Let’s Get This Show Finished 阿里巴巴和雅虎赶紧“离婚”吧
◙ Yahoo, Alibaba Dance Nears Finale 雅虎应与阿里巴巴撇清干系
◙ Alibaba Scrambles to Prove High Valuation 阿里巴巴高估值或将作茧自缚
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