After firing Carol Bartz last month, Yahoo (YHOO, Financial) received interest from a number of parties, and it began to explore those options for strategic alternatives. Jack Ma, the founder of Alibaba, where Yahoo owns a 40% stake, expressed his interest in buying Yahoo, and it is thought that he could team up with private equity to make a deal.
Tech analysts saw Yahoo as a “big bite” for any single private equity firm, especially at the time when leveraged buyouts money has dried up. Sid Parakh, the analyst at McAdams Wright Ragen said: “There are many reasons why this thing probably makes sense. If you strip out the variety of assets Yahoo owns, you are pretty much paying nothing for the core business.” Yahoo was valued by one Wall Street analyst at a little bit over $20 billion, with the value its core search and display advertising business of $7.7 billion, Asian assets of $9.2 billion and cash of $3.2 billion. Yahoo’s assets contain 40% of Alibaba and 35% of Yahoo Japan.
At the same time, it is reported that Microsoft is considering a bid for Yahoo along with Alibaba and some buyout shops such as Hellman & Friedman, Silver Lake Partners, Providence Equity Partners and tech investment DST Global. At the market value of $20 billion, it is more than 50% cheaper than the previous bid more than three years ago that Microsoft had for Yahoo. Dated back to the beginning of 2008, Microsoft had intended to buy Yahoo for $47.5 billion in a mix of cash and stock. At that time, that already represented 62% premium on Yahoo’s closing price of $19.18 a share.
In a live chat with BusinessWeek in 2009, he said: “Principles first: “Whether or not there’s a partnership to be had with Yahoo, we think our own innovation… it’s not about Yahoo’s technology. It’s really about getting the pooled volume, because you actually can improve your product faster if you have more users. If you have more advertisers, you can improve the product as well. There are returns to scale. And putting the scale together is valuable.” So if Microsoft loved to put through a deal for Yahoo at $47.5 billion, Microsoft would be crazy for not loving Yahoo now selling for only $20 billion.
Herman Leung, analyst of Susquehanna Financial Group has commented on the idea of a team up between Microsoft and Jack Ma for a Yahoo deal: “If Microsoft gets involved, then you don’t need private equity. The problem for Jack Ma is capital. Microsoft (MSFT, Financial) has $53 billion in cash. Why have to deal with bondholders and all this stuff when Microsoft can make that all happen for you?”
Tech analysts saw Yahoo as a “big bite” for any single private equity firm, especially at the time when leveraged buyouts money has dried up. Sid Parakh, the analyst at McAdams Wright Ragen said: “There are many reasons why this thing probably makes sense. If you strip out the variety of assets Yahoo owns, you are pretty much paying nothing for the core business.” Yahoo was valued by one Wall Street analyst at a little bit over $20 billion, with the value its core search and display advertising business of $7.7 billion, Asian assets of $9.2 billion and cash of $3.2 billion. Yahoo’s assets contain 40% of Alibaba and 35% of Yahoo Japan.
At the same time, it is reported that Microsoft is considering a bid for Yahoo along with Alibaba and some buyout shops such as Hellman & Friedman, Silver Lake Partners, Providence Equity Partners and tech investment DST Global. At the market value of $20 billion, it is more than 50% cheaper than the previous bid more than three years ago that Microsoft had for Yahoo. Dated back to the beginning of 2008, Microsoft had intended to buy Yahoo for $47.5 billion in a mix of cash and stock. At that time, that already represented 62% premium on Yahoo’s closing price of $19.18 a share.
In a live chat with BusinessWeek in 2009, he said: “Principles first: “Whether or not there’s a partnership to be had with Yahoo, we think our own innovation… it’s not about Yahoo’s technology. It’s really about getting the pooled volume, because you actually can improve your product faster if you have more users. If you have more advertisers, you can improve the product as well. There are returns to scale. And putting the scale together is valuable.” So if Microsoft loved to put through a deal for Yahoo at $47.5 billion, Microsoft would be crazy for not loving Yahoo now selling for only $20 billion.
Herman Leung, analyst of Susquehanna Financial Group has commented on the idea of a team up between Microsoft and Jack Ma for a Yahoo deal: “If Microsoft gets involved, then you don’t need private equity. The problem for Jack Ma is capital. Microsoft (MSFT, Financial) has $53 billion in cash. Why have to deal with bondholders and all this stuff when Microsoft can make that all happen for you?”
