To update our previous post that had tech behemoths, Google and Microsoft, and a pack of private equity firms circling Yahoo, we now find the troubled Internet giant taking matters into its own hands. Not content to settle for what Google or Microsoft might have in store for its future, Yahoo is striking out to push its own deal with private equity firms that would give them an initial minority stake with the prospect of obtaining a majority interest. What is being termed a “leveraged recapitalization” would apparently give Yahoo’s balance sheet a much needed makeover enabling it to maintain its Asia properties which would likely be sold off in an acquisition deal.
Source: www.modulussystems.com
While no PE firms have been named as possible dealmakers, Silver Lake Partners, Blackstone Group, Bain Capital and KKR and TPG Capital are among the usual suspects for their involvement with Yahoo in analyzing potential deals. It is speculated that co-founder Jerry Yang, who has a 10% stake in the company, is pursuing this strategy with PE firms separate and apart from those within the company charged with finding a solution. Essentially, the Yang strategy would align his 10% with an initial 20% stake for the PE firms to create a minority interest of 30% that could increase to as high as 45%. According to unnamed sources inside Yahoo, the deal would enable the PE firms to gain a majority interest without having to buy the company outright.
There have been no confirmations of any possible deal and information sources remain mostly anonymous, which means it’s all still speculative. What we do know is that Yahoo must do something fairly quickly and its options are limited. In the meantime, it’s business as usual at Yahoo which just announced an all-cash tender offer of $270 million for Interclick, an online advertising technology company.
