Yahoo files to spin off Alibaba stake into company called Aabaco

[NEW YORK] Yahoo! Inc. filed to spin off its shares in Alibaba Group Holding Ltd into a company to be called Aabaco Holdings Inc, a move still set for the fourth quarter.

The new entity will be independently traded and hold about 15 per cent of Alibaba ownership interest, or 384 million shares, Yahoo said in a statement Friday. The new company will include Yahoo's small-business service.

Yahoo Chief Executive Officer Marissa Mayer, trying to drive a turnaround, has benefited from the stake in Alibaba, the largest e-commerce company in China. Yahoo announced in January that it planned to spin off its stake.

Following Friday's announcement, shares of Sunnyvale, California-based Yahoo surged as much as 1.8 per cent in extended New York trading after closing at US$39.68.

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