Verizon to bid for Yahoo, Yahoo Japan stake

By Staff Writer

Apr 10, 2016 08:14 PM EDT

Verizon Communications Inc has decided to bid for Yahoo's web business. In addition to this, Verizon is planning to make an offer for stake in Yahoo's Japan subsidiary. Alphabet Inc's Google unit is also mulling over bidding for Yahoo's core business after it launched auction in February 2016 and extended the bid deadline to April 18. Yahoo has 35.5 percent stake in Yahoo Japan.

The telecom giant is planning to make its first-round bid for Yahoo's web business next week. Google is also in the race for bidding for Yahoo's core business. Until recently, several companies were seen as potential investors racing for acquiring Yahoo's web business. Corporate giants such as AT&T Inc, Comcast Corp and Microsoft Corp were among those investors that looked serious on bidding for Yahoo's core business.

Reuters reports that Verizon, Yahoo and Google denied to comment on news reports stating their willingness to acquire Yahoo's core business. AT&T, Comcast and Microsoft couldn't be reached on the latest developments. In last December, Verizon expressed its interest on acquiring Yahoo's core business. Verizon's Chief Financial Officer (CFO) Fran Shammo is exploring if there is a strategic fit for it that includes mail, news, sports and advertising technology.

Yahoo has shelved its plan to spin off its stake in Alibaba Group Holding Ltd, a Chinese e-Commerce giant. Later in February 2016, Yahoo decided to conduct an auction for its core business. Verizon's offer to acquire Yahoo's 35.5 percent stake in Yahoo Japan may keep it ahead of other bidders. 

Yahoo has stakes in two Asian internet companies-- Alibaba Group and Yahoo Japan-- and the value of these two has a negative number. For tax reasons also, as analysts predict, it doesn't make any sense for Yahoo on selling stake in Alibaba and Yahoo Japan. But, Wall Street is keeping more pressure on Yahoo for offloading core business that operates Yahoo website, Flickr and Tumblr, according to Vox Technology.

Verizon's offer to buy Yahoo's stake in Yahoo Japan will leave its Chief Executive Officer Marissa Mayer out of the mix. Verizon's CEO Lowell McAdam says that the merger of Yahoo assets with AOL under leaderships of CEO Tim Armstrong will be beneficial for investors. Mayer is working with private equity (PE) firms to formulate a package deal that sells the company.

Bloomberg further adds that Time Inc is still evaluating a bid. Private equity firms such as Bain, TPG and others are also planning to make a bid for acquiring Yahoo's core business. Some private equity firms plant to bid on their own and some prefer to make strategic alliance for the bid. Meanwhile, Yahoo has extended the deadline for the bid by one week to 18 April 2016. 

Yahoo's stock eased over one percent to $36.17 and Verizon shares, too, went down 2.84 percent. Analysts are now making a comparison of Verizon's buying Yahoo with Verizon acquiring AOL, which has a lot in common with Yahoo. 

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