Yahoo! Board Forms Independent Committee To Explore Strategic Options

(RTTNews) - Shares of Yahoo! Inc. (YHOO) rose more than 2 percent in pre-market trades Friday after the Internet giant said its board of directors has formed an independent committee to explore strategic alternatives for the company, alongside its continued consideration of a reverse spin.

"Separating our Alibaba stake from Yahoo's operating business is essential to maximizing value for our shareholders. In addition to the reverse spin, there are strategic alternatives that could help us achieve the separation, while strengthening our business," said Marissa Mayer, CEO of Yahoo!.

Last year, Yahoo! ditched its plans to spin off its lucrative stake in Chinese e-commerce giant Alibaba Group Holding Ltd. (BABA) in order to make tax savings.

Instead, the company announced the so-called "reverse spin-off" as an alternative way of separating the Alibaba stake to save million of dollars in taxes. This reverse spin-off could take more than a year to complete.

Yahoo! said Friday that the strategic review committee has engaged Goldman Sachs & Co. Inc. (GS), JPMorgan Chase & Co. (JPM) and PJT Partners Inc. (PJT) as its financial advisors, and Cravath, Swaine & Moore LLP as its legal advisor.

The strategic review committee and its advisors are reaching out with potentially interested strategic and financial parties. The committee will recommend to the company's board whether any proposed transaction is in the best interests of Yahoo! and its shareholders.

Yahoo! is under pressure from its investors, who are pushing for changes at the company. While reporting a loss for the fourth quarter in early February, Yahoo! said it is exploring strategic alternatives for some of its non-core web businesses and will lay off 15 percent of employees.

At that time, the struggling Internet behemoth also said it is continuing the work on the reverse spin of its stake in Alibaba.

YHOO closed Thursday's trading at $29.42. In Friday's pre-market activity, the shares are gaining $0.62 or 2.11 percent to $30.04.