Looks like Yahoo is selling more than just its core assets. According to a report in the Silicon Valley Business Journal, the company is also planning to sell its massive real estate property in Santa Clara, California, near the heart of Silicon Valley. The undeveloped site, spread over 48.6 acres, is expected to be bought by Chinese tech form LeEco.
The first reports of Yahoo shopping the site had surfaced in December last year after which the company also had revealed during its earning call that it might sell real estate as part of its restructuring process.
Yahoo had bought Santa Clara property back in 2006 for $106 million to with an aim to build an office or an R&D site which had been estimated to accommodate more than 12000 workers. The company had also got an approval to build up to 3 million square feet of office or research and development space on the site, in 13 buildings.
However, the construction never began and after 10 years, the company is no longer in a position to invest any more in constructions. Furthermore, by selling the property it can also meet some of its cash demands at the moment.
The deal has not yet been closed according to the report. This deal could help LeEco in expanding and establishing its presence in the valley region.
The company is engaged in diverse businesses, ranging from Internet TV, video production and distribution, smart gadgets and large-screen applications to e-commerce, eco-agriculture, and Internet-linked super-electric cars, which were announced in late 2014.
According to experts and industry report, Yahoo owns more than 1 million square feet of building space. The total worth of its real estate is expected to be around $1 billion.
On the other hand, going ahead with its auction plans, Yahoo recently reached an agreement with the activist hedge fund Starboard Value LP which had openly criticised its leadership and had proposed to completely change the leadership.
Now, Yahoo has bowed down to its demands, at least partially, and under the new agreement, it will add four new independent directors to its board. The new directors include Starboard Chief Executive Jeffrey Smith and three others associated with him.
The agreement is being looked as a part of Yahoo’s efforts to reach a truce with Starboard and averting a possible confrontation ahead of its upcoming annual meeting scheduled in late June.