Yahoo U-Turn: No Alibaba ‘spinoff’ – creates new company instead

Marissa Mayer has given birth to identical twin daughters, the Yahoo CEO announced Thursday morning on Twitter. She and her husband also have a 3-year-old son.

As with that birth, Mayer says that she will take two weeks off before returning to work.

Just before Thanksgiving, Facebook’s CEO and founder Mark Zuckerberg and his wife Dr. Priscilla Chan also gave birth to a girl, who they named Maxima Chan Zuckerberg. Despite that possibility, Mayer had been planning to complete the Alibaba spinoff by next month in a reflection of her belied the split would gain tax-free status.

The plan would create “greater transparency to ensure that Yahoo’s business operations are accurately valued”, Mayer said.

The new plan will require Yahoo to win the consent of a large cast of players including regulators, shareholders, bondholders, business partners and others “too many to name”, Chief Financial Officer Ken Goldman said on the call.

Yahoo’s board met last week to review Mayer’s stalled turnaround attempts, as well as whether to move ahead with the previously planned Alibaba spinoff.

Yahoo had hoped that its spinoff would be treated as tax-free but USA authorities said they could not guarantee this in advance. In a note to clients, he reiterated a “Buy” option on Yahoo stock with a 12-month target of US$38.

On Wednesday, Yahoo announced that it wouldn’t spin out Alibaba, and instead would spin out its internet businesses.

The plan to spin off the Alibaba stake hit a hurdle in September when United States tax authorities denied a request from Yahoo to decide whether the deal would be tax-free.

“Given the simplicity and speed of a sale and the lack of a desire by investors to undergo a year-long spin process, we think a sale of the core or entire company is most likely”, writes Peck. In the same pattern, she said her priorities are “God, family, and Yahoo, except I’m not that religious, so it’s really family and Yahoo”.

Windsor called Mayer’s performance “awful” and said Yahoo is “massively underperforming its potential and is struggling to hold onto its executives”.

Yahoo Chairman Maynard Webb said in a statement that the company became concerned about the original plan to spin off the Alibaba stake in part because of the market’s perception of tax risk.