A group of investors led by private equity firm Silver Lake, offered to buy a minority stake in Yahoo! Inc (YHOO). for $16.60 a share, according to people with knowledge of the matter.
That was lower than an offer made by private-equity firm TPG Capital, said two of the people, requesting anonymity because the bids made this week are private.
Alibaba Group Holding Ltd, aiming to buy back the stake in itself owned by Yahoo, is monitoring the situation and may still enter the bidding, another person said.
Silver Lake’s offer values Sunnyvale, California-based Yahoo at $20.6 billion, 6 per cent higher than its capitalisation at yesterday’s close.
Silver Lake is working with Microsoft Corp (MSFT) and venture capital firm Andreessen Horowitz to buy part of Yahoo, two people said. Yahoo, exploring strategic options after ousting Chief Executive Officer Carol Bartz, aims to wrap up the deal by the end of the year, people said.
Yahoo directors are likely to discuss offers at a board meeting scheduled for on Tuesday, one person said.
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Yahoo gained 2.3 per cent to $15.70 at yesterday’s close. The shares had declined 5.6 per cent this year before on Tuesday.
While Microsoft failed in 2008 to acquire all of Yahoo, it aims to use a minority holding to safeguard its 10-year web search agreement with the company.
Microsoft, based in Redmond, Washington, forged the partnership under Bartz to provide search technology to Yahoo sites. The deal was aimed at helping both companies vie with Google, the leader in US search-related advertising.
CROWDED FIELD
KKR (KKR) & Co. and Blackstone Group LP (BX) are among the private equity firms considering possible bids for Yahoo, people with knowledge of the matter said last month.
Private equity firm Thomas H Lee Partners is also considering a bid for Yahoo, people knowledgeable said.
Alibaba Group has said it’s interested in acquiring Yahoo, in part to buy back a stake the company owns. With a holding of about 40 per cent, Yahoo is Alibaba’s biggest investor.
Alibaba is waiting to see whether Yahoo’s board will deem the partial-stake bids inadequate and invite it into negotiations to acquire the whole company, a person with knowledge of the matter said. Alibaba is open to acquiring its stake back or making a larger push for all of Yahoo, the person said.
Yahoo aims to strike a deal to sell a minority stake to a private equity firm by year’s end, the Wall Street Journal reported earlier. Offers for a roughly 20 per cent stake came from at least three bidders, the newspaper reported.
Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.