Boston, MA 09/08/2014 (wallstreetpr) – Global technology company, Yahoo! Inc. (NASDAQ:YHOO) would be one of the biggest beneficiaries when the Chinese e-commerce company, Alibaba Group Holding Ltd., sells its shares in the initial public offering in the U.S. The company would sell part of its stake in Alibaba for the second time in less than three years.
To Realize Big Gain
The internet information provider would be off-loading 121.7 million shares of the Chinese company, Bloomberg said quoting a regulatory filing. Alibaba and other shareholders would be selling a total of 320.1 million shares in the U.S. This meant that Yahoo! Inc. (NASDAQ:YHOO)’s sale of share represented approximately 38% of the total shares to be sold in the IPO.
Alibaba is planning to sell the American Depository Shares or ADS for $60 – $66 a share. It meant that at the minimum price of $60 a share, Yahoo! would be getting $7.3 billion while it would be $8.03 billion if Alibaba prices its share at $66 a share. On the other hand, if the shares are priced at $63, Yahoo! would still get $7.67 billion from the sale proceeds.
Sells Alibaba Stake For Second Time
The California-based Yahoo! Inc. (NASDAQ:YHOO) has earlier divested 523 million ordinary shares of Alibaba in 2012 and realized approximately $7.1 billion. The latest divestment would fetch more than that.
The company intended to sell 208 million shares initially. However, it has reduced it to about 140 million shares in July, Bloomberg said quoting Yahoo!’s Chief Financial Officer, Ken Goldman as having said last month.
Despite selling Alibaba shares for the second time in less than three years, Yahoo!’s holding in the Chinese e-commerce company would be 16.3% after the IPO. Therefore, the could still reap higher profit after its listing in the U.S. bourses.
Yahoo! May Return Part Of It
Yahoo! Inc. (NASDAQ:YHOO)’s chief financial officer indicated that a minimum 50% of the after-tax proceeds from the share sale would be returned to its shareholders, which was in line with its commitment to maximizing shareholders’ value.
Yahoo!, which has a cash of about $4.3 billion at the end of June quarter, would see its cash position recording significant jump after the sale.
