Yahoo-Alibaba talks at an impasse: sources
By Alexei Oreskovic
(Reuters) - Talks between Yahoo Inc and China's Alibaba over the U.S. Internet giant's Asian assets have hit an impasse, throwing their plans for a $17 billion tax-free asset swap into question, according to sources briefed on the situation.
The snag in the negotiations came on the same day that activist investor Daniel Loeb, of the hedge fund ThirdPoint, launched a campaign to install his own slate of directors on Yahoo's board, further highlighting the turmoil engulfing the one-time Web pioneer.
Loeb, who has adamantly opposed Yahoo's previous efforts to strike a minority investment deal with private equity firms, disclosed plans to nominate former NBC Universal Chief Executive Jeff Zucker, along with himself and two others for Yahoo's board, in a regulatory filing with the Securities and Exchange Commission on Tuesday.
A collapse of the proposed Asian asset deal -- referred to as a cash-rich split-off -- would mark the latest setback for an erstwhile Internet leader struggling to turn its business around and appease unhappy shareholders.
One person briefed on the situation described the deal as effectively dead in the water following unreasonable terms sought by Yahoo during negotiations in Hong Kong.
But Yahoo appeared to see things differently. The company had not been informed that the tax-free deal was officially off the table, and it remained committed to continuing negotiations, according to another source familiar with the matter.
Representatives from Yahoo and Alibaba Group declined to comment.
The sources said Yahoo and its Asian partners could still strike another, taxable, deal, though that remained to be seen. Continued...