A woman jogs past Yahoo's logo at its headquarters in Sunnyvale, California. (Photo : Reuters)
A decision by Alibaba to buy Yahoo may put an end to speculations on the future of the company and the uncertainty that has been dragging on since March last year, according to an article published by Forbes.
Yahoo is expected to release the update on July 19 on the bidding process for the sale of core Yahoo, which includes Yahoo Mail, Yahoo News, Yahoo Finance, Yahoo real estate holdings, and Yahoo patents, among other properties.
The bid ranges from $3 billion to $6 billion and the bidders include Verizon, AT&T, Dan Gilbert, Quicker Loans founder, and other private equity players.
The sale price of the core Yahoo is said to be smaller compared to the combined value of its investments in Alibaba and Yahoo Japan, which make up majority of the company's market capitalization at present.
But selling the two investments would have legal and tax repercussions for its shareholders and this would not reflect Yahoo's full value price.
The article said it would be better for Yahoo to ask Jack Ma, founder of Alibaba, to buy out the company, since it would enable it to buy back its own stock, as well as get Yahoo's share in Yahoo Japan, with SoftBank as the biggest shareholder including all of Yahoo's Internet properties, patents and real estate.
If Alibaba buys Yahoo's stake in Yahoo Japan, it would boost its ties with SoftBank, which has also a large investment in Alibaba.
For shareholders, a Yahoo sale to Alibaba would resolve all legal and tax issues in selling its investments in Alibaba and Yahoo Japan, while for Alibaba, this would allow them to gain a strong position in North America.
In return, Alibaba will be able to buy back 15 percent of its own share in a single deal and boost its earnings per share. It would also get access to Yahoo's billion users across the world and cross-sell to Yahoo's various properties.
