Yahoo Announces Plans to Spin Off its Alibaba Stake in Tax-Free Manner in Response to Starboard

The Wall Street Journal, The New York Times and CNBC, among other national publications, reported that Yahoo, Inc. has decided to spin off its $40 billion stake in the Chinese e-commerce company Alibaba Group Holding Ltd. in a tax-free manner through a newly formed independent registered investment company. According to Yahoo, the stock of the investment company will be distributed pro-rata to Yahoo shareholders and the transaction is expected to close in the fourth quarter of 2015.  Olshan client Starboard Value LP has been urging Yahoo to find a tax-efficient way to monetize its investment in Alibaba, to spin off its holdings in both Alibaba and Yahoo Japan together into a separate entity from the main company and to explore a potential tie-up with AOL Inc. Olshan Partners Steve Wolosky and Andrew Freedman represent Starboard in its campaign at Yahoo.