The Board of Directors of Yahoo! Inc. rejected the plan to sell the package of shares (15%) of China's Alibaba Group, as well as its separation into a new company. The decision was taken due to the high risk of large tax payments after the refusal of the US Internal Revenue Service, to interpret the pre-charging of the transaction.
"We believe that the previously announced spin off would be tax free to Yahoo and its shareholders,” Maynard Webb, Chairman of the board said in a statement. “... and after significant deliberations, we are suspending work on the Aabaco spin off."
The board will now seek option to transfer the package of shares, together with the Internet business YAHOO! To Yahoo Japan. Market reaction is likely to be positive and may increase price of YHOO (NASD) Yahoo! Inc.
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