Yahoo to reconsider web business sale

New York: Yahoo! is considering an outright sale of its business, marking what could hasten a significant shift in the company’s thinking as it faces pressure from activist shareholders.
Just last month, Yahoo executives put forward a plan to spin off its main Internet business, the latest of several strategies they’ve proposed over the past year to deal with slowing revenue. Now, that idea may be abandoned in favor of a sale, people familiar with the matter said. The company may need a new plan in the face of an expected proxy fight by an activist investor, said the people, who asked not to identified because a final decision hasn’t been made.
Yahoo still hasn’t concluded that it has to sell and hasn’t hired a bank to run an official process or contacted potential buyers, they said. The Dec. 9 announcement was a strategic move by Chief Executive Officer Marissa Mayer to buy time to shape Yahoo into a more sellable asset, including cutting costs, said the people.
“There is no determination by the board to sell the company or any part of it,” Yahoo chairman Maynard Webb said in a conference call when the plan was unveiled in December. “We believe that the business remains very undervalued, and we are focused on realising and unlocking that value, both with separating our assets the way we are talking about, and also working on transforming our operational businesses.”
Yahoo assets
Sarah Meron, spokeswoman for Santa Clara, California-based Yahoo, declined to comment. Yahoo shares rose 1.6 per cent to $30.63 at the close in New York. The stock fell 34 per cent in 2015.
By waiting longer, the market may also readjust its view of what Yahoo is worth, two of the people said. After accounting for a $27.7 billion stake in Alibaba, $7.96 billion stake in Yahoo Japan and $5.88 billion in cash and equivalents, Yahoo’s market value of $28.9 billion shows that investors consider the main business to be worth zero or less, according to Bloomberg Intelligence.
Starboard Value and other stakeholders have been pushing for Yahoo to separate the Alibaba assets from its main business without incurring a hefty tax charge. Last month’s plan to weigh a spinoff of the core business replaced Yahoo’s earlier proposal to return Alibaba shares to shareholders and keep its Web operations intact. By selling the Internet portal, Yahoo would effectively become a holding company for its assets and cash.