$25 Billion Required to Buy Yahoo: Any Takers?

By

Two-thousand and eleven has been a year full of major acquisitions in the technology sector. Next on the chopping block could be Yahoo, as media reports speculate the company appears to be in the process of dismantling itself, claiming there is a high amount of private-equity interest in the deal.

But a buyout of the struggling Internet company won’t happen any time soon.

Barron’s recently summarized how a potential leveraged-buyout (LBO) transaction could be structured “given the high amount of private-equity interest and speculation around Alibaba Group and Yahoo shares.”

“The bottom line is that we do not see a near-term transaction given the complexities, but recent transactions validate the underlying value in Alibaba Group [of China],” Barron’s reported, noting that Yahoo appears to be in the process of dismantling itself, maybe into pieces for sale.

Barron’s asserted that Yahoo could be “an attractive candidate” for an LBO transaction.

“We think a takeout could potentially fetch a bid for $19 per share (29 percent premium) for Yahoo, which would require about $25 billion in total capital,” the report said, noting, however, the complexities in a potential transaction based on the firm’s Asian assets and the multiple parties involved mean that “a near-term event is unlikely.”

Last week, Yahoo issued a letter to employees, signaling what could be the beginning of the end.

The company’s co-founders and chairman said in a letter to employees on Friday, “Our advisers are working with us to develop ideas that we will pursue proactively,” the International Business Times reported. “We will take the time we need to select and structure the best approach,” the trio said in an internal memo.

The management team – now led by Yahoo CFO Tim Morse – also told staff it’s received “inquiries from multiple parties” interested “in a number of potential options.”

TechZone360 recently reported the struggling Internet company was contacted by potential buyers interested in acquiring “some or all” of the Sunnyvale, Calif. company. One interested bidder is private equity firm Silver Lake, which has called Yahoo board members on a possible deal, the report said, but hasn’t met with the firm.

Earlier this month, former Yahoo Chief Executive Carol Bartz was ousted by the company’s board, bringing an abrupt but not surprising end to a rocky tenure at the struggling Internet search company.



Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Jennifer Russell
Get stories like this delivered straight to your inbox. [Free eNews Subscription]

Executive Editor, Strategic Initiatives

SHARE THIS ARTICLE
Related Articles

Can Science Outsmart Deepfake Deceivers? Klick Labs Proposes an Emerging Solution

By: Alex Passett    3/25/2024

Researchers at Klick Labs were able to identify audio deepfakes from authentic audio recordings via new vocal biomarker technology (alongside AI model…

Read More

Top 5 Best Ways to Integrate Technology for Successful Project-Based Learning

By: Contributing Writer    3/19/2024

Project-based learning, also popularly known as the PBL curriculum, emphasizes using and integrating technology with classroom teaching. This approach…

Read More

How to Protect Your Website From LDAP Injection Attacks

By: Contributing Writer    3/12/2024

Prevent LDAP injection attacks with regular testing, limiting access privileges, sanitizing user input, and applying the proper encoding functions.

Read More

Azure Cost Optimization: 5 Things You Can Do to Save on Azure

By: Contributing Writer    3/7/2024

Azure cost optimization is the process of managing and reducing the overall cost of using Azure. It involves understanding the resources you're using,…

Read More

Massive Meta Apps and Services Outage Impacts Users Worldwide

By: Alex Passett    3/5/2024

Meta's suite of apps and services are experiencing major global outages on Super Tuesday 2024.

Read More