Yahoo! and Alibaba Reach Agreement on Comprehensive Plan for Alibaba Stake
Agreement Realizes Significant Value, Immediate Liquidity and Path to Future Monetization
Yahoo! Board Increases Share Repurchase Plan by US$5 Billion
SUNNYVALE, Calif. & HANGZHOU, China — Yahoo! Inc. and Alibaba Group Holding Limited today announced they have entered into a definitive agreement for a staged and comprehensive value realization plan for Yahoo!’s stake in Alibaba.
The first step is the repurchase by Alibaba of up to one-half of Yahoo!’s stake, or approximately 20% of Alibaba’s fully-diluted shares. The purchase price will be based on a valuation of Alibaba to be established through equity financings that Alibaba intends to undertake to finance the transaction, subject to a floor valuation of approximately US$35 billion. The agreement includes substantial financial incentives for Alibaba to raise the additional equity at a valuation higher than US$35 billion. At the minimum price and assuming the initial repurchase of the full 20% stake, Yahoo! would receive from Alibaba consideration of approximately US$7.1 billion, composed of at least US$6.3 billion in cash proceeds and up to US$800 million in newly-issued Alibaba preferred stock. (more…)