Verizon and Google 'planning Yahoo bid'

SAN FRANCISCO • Verizon Communications plans to make a first- round bid for Yahoo's Web business next week, and is willing to acquire the company's Yahoo Japan stake to help sweeten the offer, sources said.

Google, the main division of Alphabet, is also considering bidding for Yahoo's core business, they added. Time Inc is still evaluating a bid, while private equity funds Bain and TPG - among others - are also planning to make a run at the business, either alone or by backing a strategic acquirer.

Other potential suitors AT&T and Comcast have decided against bidding, while Microsoft, which failed with a hostile bid for Yahoo in 2008, won't bid this time, the sources said.

The news led to a rise in Yahoo Japan shares in over eight months. Yahoo said it would explore alternatives, including selling its main Internet operations, earlier this year after scrapping a long-time plan to spin off Asian assets.

The US company's stock has lost about a fifth of its value in the past 12 months as turnaround efforts led by chief executive officer Marissa Mayer stalled and sales sagged, leaving the company vulnerable to activist investors.

California-based Yahoo would prefer to sell its 35.5 per cent stake in Yahoo Japan, worth more than US$8 billion (S$10.8 billion), along with the core business, Bloomberg reported last month. First-round bids for Yahoo's main Web assets are due on Monday, Reuters said.

Activist Starboard Value, a longtime Yahoo critic, said last month it was fed up with the Web portal's leadership and called for the board to be replaced completely.

Last month, chief financial officer Ken Goldman said the committee working on a possible sale of the core operations is "more active than anyone can possibly believe".

Yahoo's projected revenue will drop almost 15 per cent and earnings by more than 20 per cent for this year, according to a slide deck it released to potential bidders, Re/code reported on Wednesday.

A version of this article appeared in the print edition of The Straits Times on April 09, 2016, with the headline 'Verizon and Google 'planning Yahoo bid''. Print Edition | Subscribe