•His reasoning: Whereas the value of Yahoo's stakes in Alibaba and Yahoo Japan (OTCPK:YAHOF) are currently discounted for future tax payments, the pre-tax valuations are what matter to Alibaba and SoftBank. The former would be buying back a 22.5% pre-IPO stake in itself, and the latter would be adding to its respective 34.3% and 43% stakes in Alibaba and YJ.
•Jackson estimates Yahoo's assets are worth $56/share to either acquirer - he values the post-IPO Alibaba stake at $33, the YJ stake at $9, and Yahoo's core business at $5, and adds $9 for cash (inc. IPO share sales).
•He speculates Alibaba (were it the buyer) could trade the YJ stake to SoftBank for part of its Alibaba stake (adding to the scope of its buyback), and notes new SoftBank Internet/media chief Nikesh Arora reportedly wanted to buy Yahoo while at Google.
•One caveat: Acquiring Yahoo would give SoftBank a 56.8% stake in Alibaba before factoring IPO dilution. The Chinese government likely wouldn't be pleased with that. Jackson suggests SoftBank could trade part of its Alibaba stake post-acquisition for "something of similar value," but doesn't say what.
•Alibaba is reportedly planning a September IPO.
Jackson came to this conclusion after "chatting with a large Yahoo shareholder who is preparing a presentation to be released soon," according to the article. He believes this could happen after Alibaba's IPO, which could occur around Labor Day.
Jack Ma and Masayoshi Son would not be where they are today if they pass up an opportunity like buying Yahoo. The only thing that might stop them is if Microsoft, Facebook, Google or Apple want all or part of Yahoo.
MSFT - No
FB - No, Regulators most likely wouldn't approve the deal
Goog - No, Regulators most likely wouldn't approve the deal
Apple - Doesn't need YHOO
Only company that would make sense would be Softbank.
Jackson also mentions the fact that Jack Ma is allowing Yahoo to keep more of their Alibaba shares at IPO. Yahoo was required to sell 262 million of their Alibaba shares at IPO, but Jack Ma (Alibaba) has lowered the amount they require Yahoo to sell two seperate times to a total of 140 million. Alibaba asked for nothing in return. Hmmm