Yahoo plans to spin off its web assets and Yahoo Japan into a new company, keeping its $31 billion stake in Alibaba.
"In the reverse spin off, Yahoo's assets and liabilities other than the Alibaba stake would be transferred to a newly formed company, the stock of which would be distributed pro rata to Yahoo shareholders resulting in two separate publicly-traded companies," the company said in a statement.
Yahoo had earlier considered spinning off Alibaba and keeping the rest, but was "concerned about the market's perception of task risk," Yahoo Chairman Maynard Webb said in the Yahoo statement. While Yahoo believed the transaction would have been tax-free, investors were concerned taxes would be high, and that would have been a drag on stock performance.
Yahoo's stock on the new plan would be $40 per share, compared with $32 under the original strategy, according to an investment note by Citigroup analyst Mark May, as reported by The New York Times.
Both SoftBank and Verizon have been named as possible buyers for Yahoo's Internet businesses. (See Could SoftBank Buy Yahoo? and Verizon CFO: Yahoo Acquisition Talk 'Way Too Premature'.)