Yahoo Inc is in talks to dispose of its 35 percent stake in its Japanese joint venture with Softbank Corp, two people briefed on the matter said.
The talks focus on transferring its stake in Yahoo Japan Corp to Softbank, the two said, 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 No. 3 mobile-phone operator, said it wasn’t holding discussions to buy Yahoo Japan shares.
Unwinding the Yahoo Japan stake, which has a market value of more than US$7.5 billion, would help Yahoo CEO 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, the people said.
Different options include an asset swap or possibly a tracking stock, with an agreement possibly coming within weeks, Reuters said, adding that a deal had not yet been reached and could fall apart.
“We’re not having discussions on an acquisition of Yahoo Japan shares,” said Takeaki Nukii, a spokesman at the Tokyo-based mobile-phone operator.
Dana Lengkeek, a spokeswoman for Sunnyvale, California-based Yahoo, declined to comment. Chizu Sasaki, a spokeswoman for Yahoo Japan, declined to comment.
Yahoo, the most-visited US Web portal, held 35 percent of the Japanese venture as its second-largest shareholder, according to data compiled by Bloomberg. Softbank has a 42 percent stake.
Based on Yahoo Japan’s market value, a deal would result in the biggest sale of a Japanese Internet asset ever, according to data compiled by Bloomberg.
In November, Softbank — Japan’s only carrier offering Apple Inc’s iPhone — announced a ￥412.5 billion (US$5 billion) repurchase of securities from Vodafone Group PLC.
Bartz is aiming to make Yahoo more efficient as it competes with Facebook and Google. In January, Yahoo said it was eliminating about 1 percent of its work force. The company is also pulling back on the amount of services it offers users.
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