Yahoo gets 'bids of at least $6.8b for core business'

The Yahoo campus in Sunnyvale, California. Yahoo, which has been eclipsed by rivals such as Google and Facebook, is considering a sale as it pursues efforts to revive growth, focusing on mobile users.
The Yahoo campus in Sunnyvale, California. Yahoo, which has been eclipsed by rivals such as Google and Facebook, is considering a sale as it pursues efforts to revive growth, focusing on mobile users.PHOTO: REUTERS

SAN FRANCISCO • Yahoo is set to put together a new shortlist of bidders for its core Internet assets after several parties, including Verizon Communications and AT&T, made second-round offers, people familiar with the matter said.

Several suitors are bidding US$5 billion (S$6.8 billion) or more for the core business, CNBC reported, with Verizon among the low bidders offering more than US$3.5 billion. The low bid is a boon to the prospects of others, including AT&T, as multiple other offers are at or above US$5 billion, CNBC said.

Among other bidders is a group led by a founder of Quicken Loans, Mr Dan Gilbert, and backed by Berkshire Hathaway chairman Warren Buffett, sources said.

While some buyout firms have dropped out of the race over concerns about whether Yahoo's Internet assets would be viable as a stand-alone business, TPG Capital and a consortium of Bain Capital Private Equity and Vista Equity Partners Management made offers, according to the sources on Thursday.

Yahoo's directors are preparing to meet for a review ahead of a final bidding round expected to lead to a decision by mid-July.

Yahoo declined to comment.

The Yahoo campus in Sunnyvale, California. Yahoo, which has been eclipsed by rivals such as Google and Facebook, is considering a sale as it pursues efforts to revive growth, focusing on mobile users.
The Yahoo campus in Sunnyvale, California. Yahoo, which has been eclipsed by rivals such as Google and Facebook, is considering a sale as it pursues efforts to revive growth, focusing on mobile users. PHOTO: REUTERS

Verizon, the largest US wireless carrier, is interested mainly in Yahoo's advertising technology tools, and has been examining how the other assets up for sale, such as search, mail and messenger, could be combined with the corresponding businesses of AOL, which it acquired last year for US$4.4 billion, Reuters reported last month.

AT&T, which has been seeking to catch up with Verizon in advertising technology as it seeks to expand in mobile video offerings, has been working with an investment bank on its bid, said one of the sources. Yahoo, Verizon, AT&T, TPG and Bain declined to comment.

Yahoo, which has been eclipsed by rivals such as Google and Facebook, is considering a sale as it pursues efforts to revive growth, focusing on mobile users. CEO Marissa Mayer has failed to revive the company since taking the helm in 2012.

Ms Mayer has been trying to revive growth and made priorities of what she refers to as "Mavens" - mobile, video, native advertising and social media.

In February, Yahoo announced that it was cutting 15 per cent of its workforce and narrowing its focus as it explored "strategic alternatives" that included selling itself after spinning off its multibillion-dollar stake in Chinese Internet colossus Alibaba.

Yahoo's struggling Internet business took a hit last month with the loss of a long-time contract to manage the Internet portal and search for AT&T.

Yahoo reported a loss in the first quarter as it courted potential buyers and examined other strategic options. It averted a proxy battle for control of the company earlier this year with a compromise that added four new board members, including a hedge fund chief who has been critical of management.

A sale of Yahoo's Internet assets would leave the company just owning a 35.5 per cent stake in Yahoo Japan, as well as its 15 per cent stake in Alibaba, which accounts for most of its value. In December, Yahoo scrapped plans to spin off its Alibaba stake after investors fretted over whether the transaction could have been carried out on a tax-free basis.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on June 11, 2016, with the headline 'Yahoo gets 'bids of at least $6.8b for core business''. Print Edition | Subscribe