Alibaba Group plans to talk directly to Yahoo chief executive Scott Thompson, side-stepping dealmakers from his company, after the failure of talks on a buy-back of shares in the Chinese firm held by the US internet pioneer.
The Hangzhou-based e-commerce giant and Japan's Softbank will reach out directly to Thompson 'to get more clarity about Yahoo's intentions for its Asian shareholdings' before negotiations are revived, a person close to the matter said yesterday.
Their action was prompted by the collapse of talks to finalise a reported tax-free transaction, called a cash-rich split-off, that has been in the works since October last year.
Alibaba Group, whose flagship company is Hong Kong-listed Alibaba.com, planned to create or use an existing subsidiary with sufficient cash and assets as payment to buy back about a quarter of Yahoo's 40 per cent stake in the mainland firm. Yahoo was also in talks to sell its 35 per cent interest in Yahoo Japan back to controlling shareholder Softbank.
Those arrangements with privately held Alibaba Group and SoftBank were designed to save Yahoo more than US$4 billion in US taxes, according to the Dow Jones-owned All Things Digital online publication.
Reports in December said the combined share repurchases by Alibaba Group and Softbank would be worth more than US$17 billion.
'The bottom line is that the reported deal with the tax advantage is dead,' the person close to the matter said. 'Yahoo seems to be scrambling to try and salvage something, but it's unclear what that is.'