Interesting article on China
Yahoo's Chinese partner may try to block Microsoft buyout
Yahoo's Chinese partner, Alibaba Group, may try to block Microsoft's hostile takeover of Yahoo, according to Reuters and a report in the Wall Street Journal. By itself, that won't block the buyout, but it certainly could force Microsoft to hand over more cash.
According to Reuters, Alibaba Group, which is 39% owned by Yahoo, is not pleased with the Microsoft takeover attempt. Citing a source within Alibaba, Reuters says, "The problem is a perception by Beijing authorities that an important Chinese firm could come under the control of Microsoft Corp, which has a reputation of using monopolistic tactics."
Reuters says that the source said that Alibaba hasn't yet been involved in the Microsoft-Yahoo talks, "but would get involved as negotiations get more serious." Reuters adds:
Foreign control of large companies in key or strategic industries is a politically sensitive issue for Beijing, which has forced many prospective buyers to cut their intended stakes or simply delayed the application process indefinitely.
The Wall Street Journal, meanwhile, says that the Alibaba Group is concerned enough about the takeover bid that it has "hired advisers to help it negotiate for expanded management independence" if Yahoo is bought out by Microsoft.
In other words, it would want to be as free of Yahoo as possible.
It's not likely that this, on its own, will kill the deal. But the fact that the world's most populous country, with the fastest-growing economy and Internet presence, has come out against the deal, can't be good news for Microsoft
