Yahoo HeadquartersA new report from AllThingD suggests the deal between Yahoo and its Asian partners has stalled, with all parties at a deadlock over tense valuation discussions. Sources close to the situation said talks have reached an impasse with both China’s Alibaba Group and Japan’s SoftBank over a deal that would save Yahoo over $4 billion in U.S. taxes.

Several issues have apparently arisen as teams from each group met in Hong Kong this week to discuss the deal, which has been in the making for quite some time.

“Getting to the promised land is very hard,” one person close to the situation said, also revealing there have been many challenging parts to the deal, including over valuation. Another source claimed, “The cash-rich deal seems dead now.” The deal values Yahoo’s lucrative stakes in Alibaba and Yahoo Japan! at around $17 billion, AllThingsD said.

Yahoo is apparently to blame for the stalled talks, as negotiators for the Internet company have recently shifted course on expectations for the arrangement. Sources close to the Silicon Valley-based company acknowledged “there have been increasing difficulties coming to an agreement,” but the company hasn’t yet walked away from discussions.

The news is a bit unexpected as negotiations have up to this point moved forward at a smooth pace, with all sides seemingly in agreement over deal assets. Previous Yahoo CEO Roy Bostock did hint at the possibility of stalled negotiations, however.

“The complexity and unique nature of these transactions is significant. While we continue to devote significant resources to these discussions, we are not in a position at this time to provide further detail or to provide assurance that any transaction will be achieved.”

Finally, one other source said that Yahoo may not feel an urgency to strike a deal due to having a new CEO in place and the company’s board getting an overhaul. In any case, Yahoo still has the issue of declining year-over-year revenue to address. Whether or not this deal will put the company back on track remains to be seen.

[via All Things D]