Chinese E-Commerce Giant Alibaba Seeks $4 Billion to Buy Yahoo Stake

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Following speculation that Yahoo stakeholder Alibaba Group would partake in a buyout of the struggling Internet company, media reports say the financial group is seeking up to $4 billion in debt financing to help the Chinese e-commerce giant buy back a 40 percent stake in Yahoo.

Although there are no public figures since the Hong Kong-based Alibaba Group is a private company, some analysts say Yahoo’s stake is worth at least $9 billion, Reuters reported.

“Sources close to the matter said Rothschild, which is acting as debt adviser to Alibaba, had sent out term sheets to banks requesting underwritten proposals for the debt financing,” according to the Dec. 8 report. “The tenor of the debt is expected to be up to three years.”

Reuters said it was unable to obtain a copy of the term sheets.

Two financial groups are discussing whether to bid on Internet company Yahoo Inc. with their Asian partners, a deal that would value the struggling Silicon Valley company at about $25 billion, according to some media reports.

Blackstone Group and Bain Capital are preparing a bid for all of Yahoo Inc., TechZone360 reported on Dec. 1. Japan’s Softbank Corp is also part of that consortium.

Reuters said that Alibaba Group, founded by billionaire entrepreneur and former English teacher Jack Ma, declined to comment.

Several news outlets, including Bloomberg and Reuters, said that Blackstone and Bain Capital could bid more than $20 per share if they pursue a joint bid with Alibaba Group of China and Softbank Corp, which would equate to more than $25 billion, based on the 1.24 billion shares that Yahoo had outstanding as of Oct. 31.

In what appears to be another step in dismantling the struggling Internet company,Yahoo shut down four of its entertainment properties last week, TechZone360 reported.

The movie blog “The Projector,” formerly co-edited by New York Magazine contributing editor Will Leitch, is shutting down, Business Insider reported.

A source within Yahoo gave Business Insider the names of the other properties that are closing. In addition to “The Projector,” Yahoo has discontinued “The Set,” which covered TV; “The Amplifier,” which covered music; and “The Famous,” which covered celebrities,” the report said.


Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Tammy Wolf
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Executive Editor, Strategic Initiatives

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