Chinese search outfit AliBaba has been rubbing every lamp in the kingdom hoping to find a way it can escape the clutches of the evil Sultan, Yahoo.
While Yahoo has lurched from crisis to crisis, e-commerce company Alibaba has a whole cave of cash and it needs oversite by the search engine like it needs a rabid camel sniffing at its privates.
According to Reuters, the founder of AliBaba, Jack Ma, wants to take the company private. But the deal that is on the table will see Yahoo still have a huge stake in Alibaba’s doings.
By making the company private, Ma will have much more control. He would have to buy back most of the 40 percent stake that Yahoo has in his company but the search engine would still have 15 percent.
The deal is complex because it looks like Alibaba Group would use bank loans and cash plus an asset swap to buy back about a 25 percent stake. This is a lot of cash. It is estimated that Yahoo is sitting on $13 billion to $14 billion of Alibaba shares.
Yahoo is under pressure from investors to pull its socks up and Alibaba’s own share history is a bit bumpy. Hong Kong analysts think that taking it private will make it more flexible for the group to pull off the transformation that it’s going through.