Alibaba Group Holding is close to a deal to buy back half of its 40% stake held by Yahoo (YHOO.NASDAQ) and could announce an agreement on the sale as soon as today, Bloomberg reported, citing an anonymous source. Alibaba would buy 20% of its shares back for US$7 billion using cash and debt to pay for the deal. The purchase could set up Alibaba to IPO in the next 18 months, according to the source. Yahoo held a board meeting to review the deal and is weighing whether to offer a dividend payment, according to tech news site AllThingsD. If the deal proceeds, it would reduce Yahoo’s presence in China and make it a more attractive acquisition target, according to Jordan Rohan, an analyst with Stifel Nicolaus & Co. “For Yahoo shareholders, the sale and subsequent march towards an IPO is a clear positive, as many questioned whether Yahoo would be able to monetize its China assets at all,” Rohan said in a note.