Yahoo! Is Giving Itself Away
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Chris DeMuth Jr. • 48 Comments
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Jacob Donnelly • 39 Comments
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Lord Baltimore • 51 Comments
Lord Baltimore • 51 Comments
Yesterday, 12:44 PM
- 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."
Yesterday, 8:48 AM
Tue, Jun. 14, 2:21 PM
- Following second-round bids, AT&T (T +0.3%), Verizon (VZ +0.4%), P-E firm TPG, and a group led by Quicken Loans founder/Cleveland Cavaliers owner Dan Gilbert remain in the running to buy Yahoo's (YHOO +2.2%) core assets, a source tells Fortune's Dan Primack. A joint bid from P-E firms Bain and Vista Equity reportedly didn't make the cut.
- "Price talk" is said to be in the $4B-$5B range. "I think AT&T is just trying to drive the price up on Verizon," Primack also reports hearing from a source.
- Bloomberg reported last week AT&T and Gilbert each bid ~$5B for Yahoo's core business, patents, and real estate. Re/code reported Verizon bid ~$3B-$3.5B for just the core business.
- Yahoo is trading higher, but that's the result of Alibaba (up 3.1%) rallying after providing a strong sales forecast.
Fri, Jun. 10, 4:08 PM
- Bloomberg reports AT&T (T +0.6%) and a group led by Quicken Loans founder/Cleveland Cavaliers owner Dan Gilbert (backed by Warren Buffett) each submitted a ~$5B second-round bid for Yahoo's (YHOO -1.4%) core business, patents, and real estate.
- Separately, a day after CNBC reported Verizon (VZ +1.4%) made a ~$3.5B second-round bid, Re/code reports Big Red made an offer valued between $3B and $3.5B, depending on "how employee compensation commitments are treated." However, Verizon's bid excludes Yahoo's patents and real estate.
- When adjusted for the absence of patents/real estate, Verizon's bid might be competitive with the others. Re/code observes Yahoo respectively values its patents and real estate at $3B and $1B, while adding others assign much lower values to each (~$1B for the patents).
- Yahoo slipped today amid a 2.1% drop for Alibaba, and a 1.3% drop for the Nasdaq.
Thu, Jun. 9, 9:48 AM
Tue, Jun. 7, 2:23 AM
- According to a new report in the WSJ, Verizon (NYSE:VZ) on Monday planned to submit a second-round offer of about $3B for Yahoo's (NASDAQ:YHOO) core internet business.
- Private-equity firm TPG was also expected to submit another bid for the assets before yesterday's deadline.
- Yahoo is projected to hold at least one more cycle of bidding, and the offers could change by the final round.
Thu, Jun. 2, 10:17 PM
- Adding to the more colorful side of the stories about potential Yahoo (NASDAQ:YHOO) bidders: Twitter (NYSE:TWTR) met with a management team led by Yahoo chief Marissa Mayer weeks ago to discuss a possible merger, the New York Post reports tonight.
- But though the teams talked for several hours, it looks to have been just an informational tire-kicking, as Twitter reportedly got out of the bidding process afterward.
- Indeed, Twitter CEO Jack Dorsey didn't show up for the confab, and that company has enough on its plate, a source said: “They’re very scared their shareholders would be outraged ... which is not, quite frankly, an unfounded fear.”
- Bids are coming in for the second round in Yahoo's auction of core assets, with Verizon (NYSE:VZ) still widely believed to be a front-runner.
- Previously: SunTrust's Peck: Three pricing scenarios for Yahoo bids (Jun. 01 2016)
Wed, Jun. 1, 3:20 PM
- Second-round bidding for the core assets of Yahoo (YHOO -2.5%) is coming in this week, and SunTrust's Bob Peck has taken a look at the remaining bidders and laid out three scenarios depending on just which assets make up the package.
- Peck reiterated his Buy on the company with a price target of $44; Shares are trading at $37 today, implying 19% upside.
- In a low-end scenario -- the assets draw $2B-$4B, in line with a recent WSJ report -- it's viable for a private equity firm to bid there, he says, looking at debt and ROE ratios and assuming cuts of about 2,000 employees.
- A slightly higher outcome is another scenario: “Leveraging the above math to justify the lower level of the range, we think there are two other assets one could add to Scenario 1 that would either be excluded from 'the core' sale or would be additive to the price": Net present value of the Yahoo Japan royalty for $1B and PP&E of $750M.
- The high-end scenario ($6B-$8B) is reserved for strategic bidders, he writes, who will justify the premium over the mid-line scenario valuing IP at $1B and pursuing more layoffs than others.
Thu, May 26, 8:33 PM
- Verizon (VZ +0.6%) is getting a leg up on competing bidders for the core assets of Yahoo (YHOO +3.3%) -- by hiring an investment bank who was one of Yahoo's top advisers last year, Reuters reports.
- The telecom has reportedly added Bank of America to its team -- which would offer not only intimate knowledge of Yahoo, but also a big balance sheet in case of financing help. Yahoo's other investment banks (Guggenheim, LionTree, Allen & Co.) are boutiques with limited ability to fund the deal.
- BofA was lead adviser last year when Yahoo explored spinning off its stake in Alibaba, a plan it later abandoned.
- While Verizon's prepared to buy all the core assets, sources said, it's mainly (and unsurprisingly) interested in the ad-tech tools, and perhaps things that can be combined with corresponding businesses at AOL.
Wed, May 25, 11:12 AM
- In a surprise revelation, AT&T (NYSE:T) made a bid for Yahoo (YHOO -2.1%) and is still in the running for the core Internet business, Bloomberg reports.
- They were out of the offing according to earlier reports. But they kept involved in the process through a stake in YP Holdings -- which was involved in the early round in April -- and while YP isn't pursuing the transaction any longer, AT&T is still around.
- The interest from the telecom giant would present a formidable challenge for presumed frontrunner Verizon (NYSE:VZ). But Verizon didn't submit one of the highest first-round bids, a pair of the sources said.
- The process has another week or likely more time to play out.
Fri, May 20, 9:57 AM
- Yahoo (NASDAQ:YHOO) is down 2.4% (better than the 6% decline it was tracking premarket) after last night's report that bids for the Internet pioneer's core business are coming in lighter than expected, at $2B-$3B.
- CNBC's David Faber says sources are calling that report "completely wrong," noting that such a bid would be lower than the lowest of the bids seen in the first round of bidding. "Nobody has seen numbers of that type" in what has been a "fairly robust auction" at this point, Faber says.
- "Could it be perhaps that Verizon (NYSE:VZ) would love to have it out there, the idea that it's coming in lower so that it conceivably could game the situation?" Faber asks. "I don't know."
- The core business has more than $600M in EBITDA, including the losing parts, which would make for a very low multiple at $2B-$3B, he notes.
- Now read Yahoo's Sale Could Still Derail »
Thu, May 19, 11:14 PM
- With just a couple of weeks before the next round of bids is due for the core assets of Yahoo (NASDAQ:YHOO), offers are expected in the range of $2B-$3B, The Wall Street Journal reports -- lower than a $4B-$8B range that had become conventional wisdom over the past couple of months.
- Verizon (NYSE:VZ) is still considered a front-runner, and it and private-equity rivals are expected to start in the low end of that range, sources told the WSJ.
- Still unclear, though, is exactly which assets those bids would cover. Bids might vary considerably from each other in structure.
- Access to a Yahoo "data room" by bidders -- and the more detailed look at Yahoo's struggles that provides -- may be dampening hopes that Yahoo had for higher bids (at one point, for $10B for the core Internet business).
- Now read Revisiting My Yahoo Investment: A Declining Search Business »
Sun, May 15, 3:31 AM
- On Friday, news broke that Berkshire Hathaway (NYSE:BRK.A) chairman Warren Buffett is backing a consortium that includes Quicken Loans founder Dan Gilbert in a bid for Yahoo (NASDAQ:YHOO).
- A successful bid would be a relatively rare journey into digital media for Buffett. But Rick Edmonds of Poynter Institute says Buffett’s history of betting on struggling companies that wield a large user base could work in Yahoo’s favor. “It’s kind of consistent with Buffett’s pattern of buying things that are out of favor, undervalued and have a big customer base,” he says. “The paradox is Yahoo's huge, it remains huge, and it's got a lot of customers. It's not the case customers are fleeing them right and left, it's just that no one can get a good pattern of growth."
- Note that former Yahoo president and CFO Susan Decker is now a director at Berkshire. Last month she said Yahoo’s next owner should "create a distinction in consumers' minds about why they love Yahoo still,” and that doing so would be better if Yahoo is "private or part of a much larger corporation." It’s possible that with Decker’s input, Buffett would look to rehire former Yahoo executives such as Ross Levinsohn.
- It’s possible that the consortium has an eye on Yahoo Finance. Sources say Gilbert has shown interest in that unit. Buffett also credited Yahoo with doing a “terrific” job of live streaming Berkshire’s shareholder conference, during which he noted BRK had been slow to adapt to new technology.
- Source: Reuters
- Now read A Shotgun Wedding For Yahoo! (Podcast)
Fri, May 13, 6:46 PM
- Warren Buffett (BRK.A, BRK.B) is in on the second round of the auction for the core assets of Yahoo (NASDAQ:YHOO), along with Quicken Loans' Dan Gilbert, according to Reuters' Greg Roumeliotis.
- Yahoo is flat in after-hours action so far.
- Buffett is backing a consortium bidding for the assets that includes Gilbert, sources told the organization.
- Updated 6:55 p.m.: And Yahoo is now up 1.2% after hours.
Fri, Apr. 22, 7:14 PM
- Yahoo (YHOO -0.5%) and advisers are set to spend the weekend narrowing down more than 10 first-round bids for its core business, ranging from $4B-$8B, Bloomberg reports -- with an eye to moving forward as soon as next week.
- They'll aim for about seven finalists and plan to offer them increased access to internal docs and management.
- The higher-end bids reportedly came from bidders who haven't spent as much time with Yahoo, which should lead to more scrutiny into the structure of the offers.
- In addition to the known bidders (that hadn't denied reports) -- Verizon (VZ +1%), YP Holdings, TPG, and Bain/Vista Equity Partners -- one or two other strategic firms were involved.
- Echoing earlier reports, SoftBank (OTCPK:SFTBY +3.4%) isn't in the bidding but is likely eager to talk with anyone who also wants the Yahoo Japan stake.
- Despite the progress, a final decision is likely at least a month away.
- Now read Yahoo Sale Could Reboot Online Ad Competition »
Wed, Apr. 20, 10:59 AM
- With Yahoo's (YHOO +3%) first-round bid shortlist out, where was Daily Mail & General Trust (OTCPK:DMTGY)? The operators of the world's most-visited English-language website were a prominent late arrival to the Yahoo bidding scene, but took a back seat (joined by IAC, Comcast and Time Inc.) to Verizon, YP, Rakuten and private equity.
- Daily Mail now says it didn't put a bid in with Yahoo by Monday's deadline, but it is in talks with parties interested in Yahoo. The publisher is up 0.6% in London.
- Yahoo's process may become a full-fledged saga for 2016. Not only is the existing sale process quite likely to run into June, but secondary interest in the resulting asset mix from the likes of Alibaba (BABA +0.7%), SoftBank (OTCPK:SFTBY -0.1%) and Daily Mail could mean even more transfers of businesses ahead.
- Alibaba had a strong (if less dramatic) case to become a dark horse, since it may have been able to pull off the functional equivalent of a highly tax-advantaged buyback.
- Now read Yahoo: Who's Ready To Take On A Legacy Digital-Native Media Turnaround? »
Yahoo!, Inc. is a global technology company, which delivers personalized search, content, and communications tools on the web and on mobile devices. The company provides a variety of products and services, many of them personalized, including search, content, and communications tools-all daily... More
Industry: Internet Information Providers
Country: United States
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