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Summary Blackstone Group and Bain Capital are considering buying Yahoo.
The two companies are discussing whether to team up with two major Asia companies to buy Yahoo.The possibility was floated late Wednesday in media reports that quoted people familiar with the matter who were not identified.Both Reuters and Bloomberg News said Blackstone and Bain Capital could bid more than $20 per share if they pursue a joint bid with Chinas Alibaba Group and Japans Softbank Corp. That would translate into more than $25 billion, based on the 1.24 billion shares that Yahoo had outstanding as of Oct. 31.Yahoos stock price hasnt topped $20 during the past three years, mainly because the companys revenue has been slipping as it loses ground in the rapidly growing Internet ad market to Google Inc. and Facebook.Yahoo and Bain Capital declined to comment Wednesday. Blackstone didnt immediately return phone calls seeking comment.Although the media reports emphasized nothing has been finalized, the prospect of a takeover bid tantalized investors. Yahoo shares surged more than 6 percent to $16.72 in extended trading.Its the latest speculation to surface about Yahoos fate since the Internet company fired Carol Bartz as its CEO in early September. Yahoos board has been reviewing a possible sale of all or part of the company since then.The companys nine directors havent publicly disclosed a timetable for its decision on whether to pursue a deal or pursue a different strategy under a new CEO. Tim Morse, Yahoos chief financial officer, has been the companys interim leader since Bartzs ouster.Private equity firms Blackstone and Bain are just one of several potential suitors flirting with Yahoo. Others reported to be interested in at least buying a major stake in Yahoo include Silver Lake Partners, Providence Equity Partners and Kohlberg Kravis Roberts & Co.Microsoft Corp. also has signed a confidentiality agreement to gain access to Yahoos books, but the worlds largest software maker doesnt appear to be in interested in buying the entire company like it was in 2008. At that time, Microsoft offered as much as $33 per share, or $47.5 billion, before ending the talks in frustration over Yahoos indecision. This time around, Microsofts main motive is protecting a 10-year deal it signed in 2009 to provide Yahoo with its search technology.Alibaba CEO Jack Ma already has publicly said his company is interested in buying Yahoo.If Alibaba joins in a successful bid for Yahoo, it would represent a turn of the investment tables. Yahoo currently owns a 42 percent stake in Alibaba, an investment it acquired for about $1 billion in 2005. Ma had hoped to buy back Yahoos stake from Bartz, but couldnt persuade her to sell. The rocky relationship between Ma and Bartz contributed to investors growing dissatisfaction with her leadership before Yahoos board ended her 32-month reign.Softbank also is an investor in Alibaba, which has established itself as one of Chinas most valuable Internet companies. Some analysts have estimated that Yahoo could sell its stake for more than $10 billion.By joining in a joint takeover bid, Alibaba would be able to get back the stake it wants from Yahoo and leave the other pieces of the company to be divvied up with its buyout partners. Both Yahoo and Softbank are major shareholders in Yahoo Japan. Wednesdays media reports said Blackstone and Bain are eyeing Yahoos U.S. operations.
