Yahoo closed a $7.6-billion sale of half its stake in Chinese internet firm Alibaba, freeing money for new chief executive Marissa Mayer to use for rebuilding and return to shareholders, the company said.
Under the terms of the deal, Yahoo is receiving $6.3 billion in cash, $800 million in preferred stock and $550 million from a technology and licensing agreement. Yahoo said that net proceeds after taxes and fees amounted to $4.3 billion.
Mayer said that the company would return $3.65 billion to shareholders, though it's unclear whether that will be through a share buyback or direct dividend payments.
"This yields a substantial return for investors while retaining a meaningful amount of capital within the company to invest in future growth," she said.
Yahoo continues to own about 23 percent of Alibaba's common stock, valued at $8.1 billion, plus approximately $800 million in preferred stock.
Under the terms of its agreement with Alibaba, Yahoo can sell half of its remaining stake at the time of an initial public offering (IPO) of Alibaba. After an IPO, Yahoo has the right to sell its
remaining shares at its discretion following a customary lock-up period.
