Yahoo board to discuss sale of core business

In a series of meetings that will take place between Wednesday and Friday, the company will weigh on the decision to sell its core business, which includes Yahoo Mail, as well as its news and sports sites, reported The Wall Street Journal.

The news comes as there is growing concern over CEO Marissa Mayer’s lack of progress when it comes to Yahoo’s future, despite the fact that the board has given her several years to try and turn the company around.

Share prices of Yahoo rose by more than 5 to 7 percent on Tuesday’s after hours trading due to a recent media report that claims the company’s board is mulling plans to sell its main assets.

SAN FRANCISCO/BENGALURU The board of Yahoo Inc is weighing a sale of its core Internet business when it meets this week, a source familiar with the matter told Reuters.

Mayer is also working on a major overhaul that will jettison an unspecified number of unprofitable Yahoo services and could lay off hundreds of workers.

Since after the Internal Revenue Service declined to bless the potential deal as tax-free, Starboard called on Yahoo to abandon the spinoff of the Alibaba stake last month. That Mayer is now said to be considering the plan is indicative of the pressure she’s found herself under. She has driven Yahoo to invest in online video, advertising technology and mobile software.

Since her appointment in 2012, chief executive officer Marissa Mayer has struggled to drag the internet giant out of a long period of stagnating growth, though she has brought some stability. Recently, Starboard Value LP, an activist hedge fund investor, urged the company to sell instead all the remaining assets, particularly its core business, which has been flagging for some time now.

The report also noted that Private-equity firm TPG Capital has looked at buying media properties within Yahoo.

In a letter dated Nov 19, Starboard estimated that Yahoo’s enterprise value is US$31.2 billion (S$44 billion).

“I have very aggressive expectations for Yahoo’s core business”, Mayer said in October.

The company’s stake in Yahoo Japan is held at a 30 percent discount off its actual market value, while its Alibaba stake is held at about a 59 percent discount.

Though, Yahoo believes that IRS probably will favor the plan, the event where it decides to go against it is fearful indeed.

Its stake of 15% in Alibaba has a current worth of $32 billion, while its stake of 35% in Yahoo Japan is worth approximately $8.5 billion.