Chinese e-commerce giant Alibaba Group has said publicly it wants to buy back its shares that Yahoo owns — but what if it did so by buying all of Yahoo? (NSDQ: YHOO) Stifel Nicolaus analyst George Askew makes the suggestion in a report this morning, first cited by TechTraderDaily.
Askew’s reasoning: “We acknowledge that the idea of Alibaba Group acquiring Yahoo! is unconventional and likely controversial; however, such a deal would serve the dual purpose of enabling Alibaba Group to repurchase an important ownership stake while also unlocking the significant value embedded in Yahoo! shares.”
Askew says Alibaba Group could pay about $25 a share, or $35.3 billion, to buy Yahoo, although he says the company could spend less if it structured the deal differently — possibly by spinning off Yahoo’s holdings in Yahoo Japan or keeping part of Yahoo as an independent public company.
Seems unlikely — for one, Alibaba has said it plans to spend $200 million on acquisitions by 2012 — not billions. But it’s worth noting that Yahoo CEO Carol Bartz has said the company would “absolutely” entertain buyout offers — as long as they were at the “right price.”