Yahoo said on Monday that it will push ahead with the spin-off of its stake in Alibaba, the Chinese ecommerce company, by the end of the year, despite signs that US authorities are unhappy about allowing such deals to take place without incurring a tax charge.
The disclosure that the spin-off would go ahead, subject only to an opinion from the company’s tax advisers, sent Yahoo shares up by more than 3 per cent in after-market trading, erasing part of the 5.25 per cent loss they had suffered during normal trading on Monday.
Doubts about the fate of Yahoo’s long-planned disposal of its Alibaba stake, currently worth some $22bn, were heightened earlier this month when it revealed that the Internal Revenue Service had declined to issue a letter in advance of the deal confirming that it would be tax-free. The IRS did not indicate which way it would rule, leaving a question over a deal that is central to the $27bn value of Yahoo itself.