As expected, Yahoo announced that it has closed the initial sale of shares in Alibaba. With the deal, Yahoo received approximately $7.6 billion, $6.3 billion in cash and $800 million in preferred shares of Alibaba in exchange for half of Yahoo’s 40 percent stake in Alibaba. Also, along with this the company received a payment of $550 million for a technology and intellectual property license agreement.
The company will return approximately $3.65 billion in after-tax proceeds to shareholders, or 85 percent of the net cash proceeds from the initial sale of its shares in Alibaba, which also includes the amount of $646 million the company returned to shareholders through share repurchases. Further under the terms of the agreement with Alibaba, the second phase allows Yahoo to monetize hald of its remaining stake at the time of Alibaba’s IPO. And, soon after IPO, Yahoo can sell its remaining shares at its discretion following a customary lock-up period.
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