In a new article, YoungChinaBiz discussed the possibility that Alibaba Group Holding Ltd (NYSE: BABA)’s new $3 billion bank loan is setting the company up for a high-profile acquisition of either Groupon Inc (NASDAQ: GRPN) or Yahoo! Inc. (NASDAQ: YHOO). The article suggests that the loan hints at a possible acquisition because Alibaba already had $18 billion on its balance sheet at the end of last year and could now be lining up the cash for a large buyout.
“At the end of the day, I would put chances for a Groupon bid a bit higher than a Yahoo stake buyout, though I would still peg a Groupon bid at only 50-50,” the author projected.
Groupon’s stock surged more than 80 percent in the days following Alibaba’s disclosure of a 5.6 percent stake in the company last month. As soon as the position was disclosed, the market began to speculate about a possible full buyout in the future.
However, a source close to the matter told Benzinga that investors shouldn’t jump to conclusions about the stake and Alibaba takes minority positions in a large number of smaller companies without plans to take majority stakes.
Source: Don't Jump To Conclusions On Alibaba's Groupon Stake
If Yahoo can find a buyer for its core business, such as Verizon Communications Inc. (NYSE: VZ), Alibaba could buy out Yahoo’s shell company and essentially buy back Yahoo’s large stake in Alibaba without paying capital gains taxes on the stake.
Disclosure: the author is long Alibaba.
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