The deal - the latest proposals put forth in recent months to resuscitate the once high-flying Internet company - is expected to be considered by Yahoo's board on Thursday, one of the sources said.

The board was uninterested in entertaining offers for the entire company at this point, the source, who spoke on condition of anonymity, added.

Yahoo's increasing difficulty in competing with Internet heavyweights such as Google Inc and Facebook have forced it to explore proposals to revamp its business. The former Internet powerhouse, which fired its Chief Executive Carol Bartz in September, has a market value of around $18.5 billion.

The company's board has come under fire from prominent shareholders for its seeming lack of movement and for putting its own interests ahead of those of shareholders.

Alibaba chief Jack Ma has said several times he would like to buy back Yahoo's stake in his company, one of Asia's largest Internet corporations. Investors have long said Yahoo's investment in Alibaba, along with its 35 percent slice of Yahoo Japan, are far and away the U.S. company's most prized assets.

Last week, sources told Reuters a consortium consisting of private equity group Silver Lake, Microsoft Corp and venture capital firm Andreessen Horowitz were reworking a bid for a minority stake in Yahoo.

In the latest deal, Yahoo would effectively transfer most of its 40 percent of Alibaba back to the Chinese company and all of its stake in Yahoo Japan to Softbank Corp in return for cash and assets, one of the sources said.

The exact value of the deal would depend on how the assets are valued, one source said.

Yahoo shares, which languished in the red along with much of the technology sector on Wednesday, reversed course and ended the session almost 6 percent higher at $15.99. It inched further upward in after-hours trading to $16.09.

Yahoo was not immediately available for comment. The possible deals were first reported in The New York Times.

(Reporting by Paritosh Bansal and Peter Lauria in New York; editing by Matthew Lewis and Andre Grenon)

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