Alibaba Seeking to Buy Out Yahoo Again

Added by Gary Dunn on November 16, 2010

China’s biggest e-commerce company, Ali Baba group, is seeking to buy 40 % stake held by Yahoo in the group. The founder has started negotiations with privately equity companies to arrange finance for the purchase of the stake.

The original stake was purchased for $ 1 billion in 2005. Currently, the stake is valued at four times the original price. Although nobody is prepared to go on record, sources in the know admit that the group is seeking to end Yahoo’s participation in the company.

This has increased speculation about Yahoo’s role considering the fact that it has not named a second member to participate in the Board. This is Yahoo’s contractual right. As on date, Yahoo’s co-founder is the only representative in the board of directors.

Alibaba has tried to purchase Yahoo’s stake unsuccessfully in the past. Firms have also tried buying Yahoo to combine it with AOL or News Corp but the deal was always hinged on the stake sale in Alibaba.

The company has dismissed speculation and sought time to select the right candidate. Asia is a big market with half of Yahoo’s market value situated in Asian assets. Yahoo has dismissed repeated attempts by Alibaba for the buyout