Yahoo scraps plan to spin off Alibaba stake
Yahoo Inc said it scrapped a plan to spin off its stake in Alibaba Group Holding Ltd, citing tax concerns.
Yahoo's assets and liabilities other than the Alibaba stake will be transferred to a new company, resulting in two separate publicly traded entities, Yahoo said on Wednesday.
The stock of the new company will be distributed pro-rata to Yahoo shareholders.
Yahoo, which has a market capitalization of about $35bn, owes most of its valuation to its stakes in Alibaba and Yahoo Japan Corp.
The Alibaba stake alone is worth more than $30 billion.
Yahoo shares were up 2 percent at $35.53 in premarket trading.
"In addition to our efforts to increase value and diminish uncertainty for investors, the ultimate separation of our Alibaba stake will be important to our continued business transformation," Chief Executive Marissa Mayer said in a statement.