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What is a reverse spin-off

Following reports yesterday that Yahoo was ditching its plans to spin off its lucrative stake in Alibaba, the California-based company has now confirmed that it is, indeed, suspending the move. The mooted spin-off was Yahoo’s attempt to make tax savings on its 15 percent stake. A spinoff is the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent. A reverse Morris trust is a tax-optimization strategy in which a company wishing to spin off and subsequently sell assets to an interested party can do so while avoiding taxes on any gains from such asset disposal. BREAKING DOWN Reverse Morris Trust. The reverse Morris Trust starts.

A Reverse Morris Trust in United States law is a transaction that combines a divisive reorganization (spin-off) with an acquisitive reorganization (statutory. A corporate spin-off, also known as a spin-out, or starburst, is a type of corporate action where a . The company that purchases the "shell" then does a reverse takeover, to transfer an operating business into the new company. This is often. A spinoff is defined in ASC Equity - Spinoffs and Reverse Spinoffs as a transfer of assets that constitute a business by an entity (the spinnor) into a new.

Reverse Morris Trust — Following a spin-off, a third party acquires stock representing less than 50% of the vote and value of SpinCo. • Sponsored spin — A. Now it's official: Yahoo is not going to sell off its stake in Alibaba, because it is spooked about taxes. Instead, Yahoo is going to sell off. In a spin-off, the parent company (ParentCo) distributes to its existing shareholders as a first step immediately preceding a Reverse Morris Trust transaction. The troubled Internet company will instead do a reverse spinoff of its other assets, putting those businesses into a separate publicly traded.

(с) 2019