Yahoo said to be in discussions to dispose of Japan venture with Softbank

Bloomberg | March 2, 2011 | Brian Womack, Serena Saitto and Mariko Yasu
Yahoo! Inc. is in talks to dispose of its 35 percent stake in its Japanese joint venture with Softbank Corp., according to two people briefed on the matter.
The talks focus on transferring its stake in Yahoo Japan Corp. to Softbank, said the people, confirming an earlier Reuters report and asking not to be identified because the discussions are private and may not result in an agreement. Softbank, Japan’s third-largest mobile-phone operator, said it isn’t holding discussions to buy Yahoo Japan shares.
Yahoo Japan, the nation’s most-visited web-portal, rose the most in more than four months in Tokyo trading, while Softbank fell. Unwinding the Yahoo Japan stake, which has a market value of more than $7.5 billion, would help Yahoo Chief Executive Officer Carol Bartz generate funds as she eliminates jobs and sheds unsuccessful businesses to drive a turnaround and compete with Facebook Inc. and Google Inc.
“As for Softbank, I doubt if it’s worth paying a big premium on Yahoo Japan shares as Softbank already has the revenue source of mobile phone business and is investing in China businesses,” said Shinji Moriyuki, an analyst at Nikko Cordial Securities Inc. in Tokyo.
The disposal may not be structured as an outright sale to help Yahoo avoid taxes on the proceeds, said the people. Different options include an asset swap or possibly a tracking stock, with an agreement possibly coming within weeks, according to Reuters. A deal hasn’t yet been reached and could fall apart, according to the report.
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