The saga continues at Yahoo Inc. (NASDAQ: YHOO). First there was the $45 billion buyout offer from Microsoft Corp. (NASDAQ: MSFT) in 2008. That was rejected. Then earlier this year Alibaba Group, China’s largest e-commerce company, reportedly tried to buy back Yahoo’s 40% stake in the company for around $10 billion. Again, Yahoo said, “No thanks.”
Yesterday, word hit that AOL Inc. (NYSE: AOL) had hired advisers to explore strategic options for AOL, which included a possible merger with Yahoo. About the only company that doesn’t appear to be interested is Google Inc. (NASDAQ: GOOG), which doesn’t need the headache of any anti-trust hearings that would surely follow an attempt to tie-up with Yahoo.
This morning, Reuters is reporting that Jack Ma, Alibaba Group’s founder, chairman, and CEO, is trying to raise cash from private equity funds for a management-led buyout of Yahoo’s stake in Alibaba Group. According to Reuters, Yahoo’s stake is worth up to $4 billion, but that seems low compared to other estimates that Yahoo’s stake in Alibaba represents half of Yahoo’s $22 billion market cap.
No names have been thrown around regarding the possible buyout, but both private-equity firm Silver Lake Partners and Blackstone Group (NYSE: BX) were reported to be looking at a joint bid with AOL for Yahoo. It seems certain that any bid for Yahoo would involve divestiture of the company’s stake in Alibaba and its 35% stake in Yahoo! Japan. After all, realizing shareholder value is the whole reason for private-equity investment in the first place, and there’s no surer way to realize that value than carving a company up as quickly as possible.
Bloomberg is reporting that KKR & Co. (NYSE: KKR) is interested in joining a consortium of buyout firms in making an offer for Yahoo in an effort to take the company private. Yahoo has also reportedly hired Goldman Sachs Group Inc. (NYSE: GS) to defend itself against takeover possibilities.
Whether or not anything ever happens, one thing that is happening for sure is that Yahoo’s share price is getting a bump. Since mid-October, when the first rumors surfaced of a private-equity buyout, Yahoo shares have jumped +12%, including a boost of about +5% this morning on heavier than average volume.
