It’s been a relatively slow month in the private equity arena, so we’ll stay with the Yahoo saga for at least one more week. In what is turning out to be a global game of musical chairs with an ever expanding list of suitors and an unending number of scenarios, a final Yahoo deal remains elusive. Yet, the board is determined to finalize a deal in time for the holidays. The ultimate outcome is still anyone’s guess, but, based on all of the possible scenarios, it’s a pretty fair bet that it will be the end of Yahoo as we know it. Among the least likely scenario, favored by investors, is that the company is purchased as a whole and kept intact.
Source: http://icons.mysitemyway.com
An emerging scenario is that Yahoo’s Asian property, Alibaba Group in concert with Japan’s Softbank Corp, will finance a deal through Blackstone Group and Bain Capital to buy the company as a whole and then spin off the U.S. operations. Alibaba wants its 42% stake back from Yahoo which acquired it six years ago for $1 billion. It’s speculated that Blackstone and Bain would snatch up the U.S. operations.
Microsoft is still pushing another private equity financing that will enable it to maintain control over its ad relationship with Yahoo. That deal, and similar deals being floated by other private equity firms, such as Silver Lake Partners and TPG Capital, only seeks a 20% stake in the company with conversion rights that could ultimately have them take a controlling interest in the company down the road.
The Blackstone-Bain deal has investors excited because it could result in a bid of more than $20 a share which they haven’t seen for a few years. The speculation has pushed the company’s shares up over $16 in recent trading.
Yahoo’s board remains mum on the subject. Investors are getting anxious. Private equity firms are buzzing. And, the Internet world, which really hasn’t seen anything of substance from Yahoo in more than a decade, is simply yawning.
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