- Leaks that Verizon (VZ +1%) continues to be the front-runner to close a deal for core Yahoo (YHOO +1%) have the telecom spending about $5B on the deal, vs. an earlier $3.75B-$4B.
- While earlier Verizon interest excluded Yahoo's patent portfolio and real estate, the current talks do reportedly include the real estate.
- Yahoo had set aside about 3,000 patents into a subsidiary called Excalibur for separate auction by Black Stone IP, though other bidders like AT&T (T +1.5%) or a group with Quicken Loans' Dan Gilbert (still reportedly talking with Yahoo) or an aggressive TPG might yet want to buy the IP along with core assets.
- The deal would be a "great outcome," Piper Jaffray analyst Gene Munster says, with time of the essence since "the real value here is unlocking Yahoo Japan and Alibaba (BABA +0.1%) in a cash-free transaction. And they really need to get that done before the election."
- The $5B figure is still a bit low, Munster says, as he expects the deal to be around $6B. "If you look at the tax benefit for Yahoo Japan and Alibaba, that's about a $10B or $11B tax benefit, so a billion dollars here and there doesn't make much difference; there's still upside to Yahoo shares."