Microsoft-Yahoo war may spur Alibaba buyback

Font Size

Print

Feedback

Email

Discuss

Related Articles

Microsoft-Yahoo deal 'total fiction': ReportMobile apps find a home on touchscreen devicesGoogle SearchWiki: Personalise search resultsMS rules out buying Yahoo, likes search deal

Shanghai, April 7: : ownership of Yahoo's stock and not Yahoo's ownership in Alibaba, said the lawyer, who declined to be identified because his firm could advise one of the companies.

So, if Yahoo is bought, Alibaba's argument is that it amounts to an indirect transfer and triggers the right of first offer, but New York state laws govern the definition of 'indirect' in this case, said the partner at a U.S .law firm who has worked on international M&A transactions.

"Microsoft, it seems, unless there is language or other terms elsewhere, simply will step into the shoes of Yahoo in the Alibaba agreement," he said.

But Carol Glendenning, a mergers and acquisitions lawyer at Strasburger and Price LLP, said that "a sale of Yahoo stock would be an indirect transfer of the beneficial ownership that Yahoo owns in Alibaba, which falls into the definition of a transfer."

Both lawyers based their assessment on excerpts of the agreement sent to them by Reuters.

Under the 2005 agreement, which is available on the U.S. Securities and Exchange Commission Web site, Yahoo also has a pre-emptive option of refusing to sell to a list of competitors.