Yahoo abandons plan to spin off Alibaba stake

Yahoo! Inc. confirmed that it has decided to suspend work on its pending plan to spin off the company’s remaining holdings in Alibaba Group due to tax concerns.

The company said it will now evaluate alternative transaction structures to separate the Alibaba stake, focusing specifically on a reverse of the previously announced spin transaction.

In the reverse spin-off, Yahoo's assets and liabilities other than the Alibaba stake would be transferred to a newly formed company, the stock of which would be distributed pro rata to Yahoo shareholders resulting in two separate publicly-traded companies.

Chief executive officer Marissa Mayer said: “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."

"In 2016, we will tighten our focus and prioritize investments to drive profitability and long-term growth. A separation from our Alibaba stake, via the reverse spin, will provide more transparency into the value of Yahoo's business."

At 1227 GMT, Yahoo! shares were up 2% to $35.53 in pre-market trade.