Yahoo! Completes First Stage of Alibaba Share Repurchase Agreement Valued at $7.6 Billion
SUNNYVALE, Calif.--(BUSINESS WIRE)--
Yahoo! Inc. (NASDAQ:YHOO) announced today that it has closed the initial
sale of shares in Alibaba Group Holding Limited. At closing, Yahoo!
received approximately $7.6 billion, $6.3 billion in cash and $800
million in preferred shares of Alibaba in exchange for half of Yahoo!'s
40 percent stake in Alibaba, as well as a payment of $550 million for a
technology and intellectual property license agreement. Net cash
proceeds after taxes and fees from the first stage of the repurchase
agreement total approximately $4.3 billion.
"The completion of the first stage of the Alibaba share repurchase
represents a significant milestone for both Alibaba and Yahoo!. The
execution of the deal was excellent, and we are excited to announce its
completion well within the six-month time frame we communicated. I look
forward to continued partnership with Jack Ma and his team as they
position Alibaba for future growth," said Yahoo! CEO Marissa Mayer. "The
Yahoo! board and management have met, reviewed the strategy with regard
to the proceeds, and are pleased to announce that we will be returning
$3 billion of the proceeds to shareholders in addition to the 'down
payment' of $646 million made over the past few months. This yields a
substantial return for investors while retaining a meaningful amount of
capital within the company to invest in future growth."
Yahoo! will return approximately $3.65 billion in after-tax proceeds to
shareholders, or 85 percent of the net cash proceeds from the initial
sale of its shares in Alibaba. This amount includes $646 million the
company has already returned to shareholders through share repurchases
since the announcement of the transaction, as well as an additional $3.0
billion.
After accretion from the Alibaba share repurchase, Yahoo! continues to
own approximately 23 percent of Alibaba Group common stock, valued at
$8.1 billion based on this most recent round of funding. Together with
its preferred stock, the implied valuation of Yahoo!'s entire remaining
stake is approximately $8.9 billion.
Under the terms of the agreement with Alibaba, the second phase allows
for Yahoo! to monetize approximately half of its remaining stake at the
time of an initial public offering (IPO) of Alibaba. After an IPO,
Yahoo! has the right to sell its remaining shares at its discretion
following a customary lock-up period.
Forward-Looking Statements
This press release contains forward-looking statements (including in the
quotations in this press release) concerning the agreement entered into
by Yahoo! with Alibaba Group Holding Limited, including, without
limitation, statements about the ability of Yahoo! to monetize its
holdings in Alibaba in the future, potential future actions by Yahoo!
and Alibaba concerning future business initiatives between Yahoo! and
Alibaba and the potential for an initial public offering of Alibaba
shares, and other expected benefits of the agreement and related
agreements. Risks and uncertainties may cause actual results and
benefits of the transactions contemplated by the agreement and related
agreements to differ materially from management expectations. The
potential risks and uncertainties include, among others, uncertainty
regarding the future valuation of Alibaba; uncertainty regarding if and
when there will be an initial public offering of Alibaba shares;
uncertainty regarding any future business initiatives with Alibaba;
general economic and market conditions; and the possibility that some or
all of the expected future benefits of the agreement and related
agreements may not be realized. All information set forth in this press
release is as of September 18, 2012. Yahoo! does not intend, and
undertakes no duty, to update this information to reflect subsequent
events or circumstances. More information about potential factors that
could affect Yahoo!'s business and financial results is included under
the captions "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Yahoo!'s Annual Report
on Form 10-K for the fiscal year ended December 31, 2011, as amended,
and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012,
which are on file with the Securities and Exchange Commission ("SEC")
and available at the SEC's website at www.sec.gov.
Yahoo! is the trademark and/or registered trademark of Yahoo! Inc.
About Yahoo!
Yahoo! is focused on creating deeply personal digital experiences that
keep more than half a billion people connected to what matters most to
them, across devices and around the globe. Yahoo!'s unique combination
of Science + Art + Scale connects advertisers to the consumers who build
their businesses. Yahoo! is headquartered in Sunnyvale, California. For
more information, visit the pressroom (pressroom.yahoo.net)
or the company's blog, Yodel Anecdotal (yodel.yahoo.com).
Yahoo! Inc.
Anne Espiritu, 408-336-0006
aespiritu@yahoo-inc.com
Source: Yahoo! Inc.
News Provided by Acquire Media
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