NEW YORK: Alibaba, China’s top e-commerce player, will re-purchase a 20-percent state in itself from US portal Yahoo! for at least $7.1 billion, the companies announced Sunday.
“At the minimum price and assuming the initial repurchase of the full 20% stake, Yahoo! would receive from Alibaba consideration of approximately $7.1 billion, composed of at least $6.3 billion in cash proceeds and up to $800 million in newly-issued Alibaba preferred stock,” the firms said in a statement.
Yahoo! stock price had climbed Friday on rumors that it was close to a multibillion-dollar deal to sell half of its stake in Alibaba.com back to the Chinese online shopping portal.
Yahoo! shares were up nearly four percent to $15.42 on the Nasdaq exchange by the close of trading due to unconfirmed reports that the only hurdle remaining was for the boards of the companies to sign off on the deal.
Alibaba had long expressed a desire to buy back the 43 percent chunk of the company owned by Yahoo!, but repeated attempts at working out terms failed. Cashing out the Yahoo! share of Alibaba had been part of a turnaround plan by freshly ousted Yahoo! CEO Scott Thompson.