That's unlikely to be enough. At its current price of $15.92/share, Yahoo is already worth $20.1 billlion.That's up nealry 50% from an August low of $11.09, achieved a month before former CEO Carol Bartz was fired.
Ma's partners in his bid are said to be Silver Lake Partners and Russia's Digital Sky Technologies. Temasek Holdings of Singapore might join that bid, in order to gain a bigger share of Alibaba.
The bid could be countered by a group including KKR and Blackstone (BX), with Microsoft (MSFT) behind-the-scenes to protect its own deal on Yahoo search. Or Microsoft could make a new bid on its own, looking to combine the two search engines and ad networks.
There are also reports that Yahoo co-founder Jerry Yang could participate in that deal, with an aim to taking the company private.
Any deal would be complicated by three factors:
- Yahoo's 40% stake in Alibaba, which is becoming China's version of Amazon.com (AMZN).
- Yahoo's co-ownership of Yahoo Japan, with Softbank (SFTBY.PK). Softbank wants the half-interest.
- Microsoft's deal to handle search operations for Yahoo itself, which came after it made a failed bid of $41.7 billion for the company a few years ago.
The time needed to untangle Yahoo, which would be a key part of any deal, means arbitrageurs will have to wait a considerable time for their money.
But the bottom line is clear. Yahoo's days as an independent company are numbered. The game of buying it and tearing it into pieces is afoot.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.