Yahoo can’t just sell its stake in Chinese Internet company Alibaba back to Alibaba because that would incur a huge multi-billion dollar tax bill that would blow a hole in the company’s market cap.So it’s going to do a transaction called a cash-rich split, where Alibaba will buy some other operating business and trade it to Yahoo for Alibaba stock. (And pay some cash.)
Anyway, we’ve just learned from Bloomberg two of the companies that Yahoo might want in just such a deal: WebMD and Weather Channel.
Apparently, the Yahoo board decided on these two companies BEFORE it hired new CEO Scott Thompson.
So I guess we know how much say he has right now.
One last thought: WebMD and Weather Channel may or may not be a great fit for Yahoo. But you know what they definitely are? They are definitely part-owned by the PE firms lending Alibaba some of the money it’s using to buy back its stake from Yahoo.
So I guess we know who the real winners in this deal are going to be.
(Hint: It’s not Yahoo shareholders.)