Yahoo Inc shares rose as much as 6.7 percent on Friday after a report that it was close to selling part of its valuable stake in the Alibaba Group.
Shares of Yahoo climbed as high as $15.87 before easing to $15.64, up 5.2 percent.
Yahoo and Alibaba Group, the Chinese Internet group that runs e-commerce site Alibaba.com, are close to an agreement that could happen as soon as Monday, according to a report in All Things D, citing unnamed sources.. Yahoo would sell one-half of its 40 percent stake back to Alibaba.
Representatives from both Yahoo and Alibaba said they do not comment on rumor or speculation.
Yahoo's Asian assets, which also include a stake in Yahoo Japan, are considered the crown jewels of the company and its fate is on top of mind for investors.
Talks between Yahoo and Alibaba over the stake have been ongoing for some time.
Stifel Nicolaus analyst Jordan Rohan estimated Yahoo could receive $4.6 billion in after-tax cash proceeds, or $3.75 per share, he wrote in a note.
Rohan said the deal would be a positive for shareholders since "Yahoo shares become a less risky investment through this deal."
He also noted the transaction could reduce the amount of capital necessary to take the company private -- a "likely scenario."
The potential sale of the asset is especially noteworthy against the backdrop of Yahoo's struggles over the past decade as it tries to regain relevance in the face of competition from the likes of Google Inc and Facebook Inc.
In the latest in a string of executives departures over the past several years, Yahoo Chief Executive Scott Thompson stepped down on May 13 after a controversy over a fake computer science degree -- unearthed by hedge fund Third Point.
Third Point, run by Daniel Loeb, is the one of Yahoo's biggest shareholders and pushing for changes.
(Reporting By Jennifer Saba; editing by Jeffrey Benkoe)