Google Inc. (NASDAQ:GOOG) is a virtual printing press for money, so it's not too surprising to hear it may be looking to acquire U.K.-based Yellow Pages publisher Yell Group plc [YELL], a company with a $5 billion market cap. Published reports indicate Google could offer as much as 500 pence a share for Yell, or $7.7 billion. The offer would amount to a sizable 48% premium to where shares of Yell were trading on the London Stock Exchange Monday.
While shares of the company traded at over 640 pence as recently as last February, the rumored price appears a little rich considering the fact that Yell still has a sizable print advertising directory and Google would be more interested in its online operations. But growth in its online business has been robust. For the six-month period ending Sept. 30, its U.K. online advertising revenues from Yell.com rose 52%, while its Yellowbook.com online operations in the U.S. were up 68%.
Those are the types of numbers that appeal to Google and would presumably grow even faster under its umbrella. And it's why rumors of buyout interest from Google likely will persist. - David Shabelman