Almost every major U.S. private-equity firm is reportedly studying a potential bid for struggling Internet company Yahoo! in a complex deal that could be worth between $16 and $18 a share.
According to The Wall Street Journal, firms conducting preliminary research on Sunnyvale, Calif.-based Yahoo! include KKR, Bain Capital, Carlyle Group, Blackstone Group (BX), TPG Capital, Silver Lake Partners, Hellman & Friedman, Providence Equity Partners and Warburg Pincus.
As many as four different buyout firms could team up to make an offer, the paper reported.
At $16 to $18 a share, Yahoo! would be valued at about $20.2 billion, just north of its current market cap of $19.5 billion. In 2008 Yahoo! rejected a $44.6 billion takeover offer from Microsoft (MSFT), saying it undervalued the company. Since that time Yahoo! has lost serious market share to rivals Google (GOOG) and Facebook and struggled to stop a slide in revenue.
The report appeared to be among the first to spell out a specific price range for Yahoo!, which ousted CEO Carol Bartz last month and began feeling out potential suitors.
The news initially sent the company’s stock spiking above $16.10, but they quickly gave up those gains and closed near session lows at $15.94, up 2.98% on the day.
Yahoo!’s bankers, Goldman Sachs (GS) and Allen & Co, are seeking turnaround strategies from potential buyers, the Journal reported. Yahoo! is also implementing nondisclosure agreements that prohibit potential buyers from talking to each other.
There have been conflicting reports about the level of interest from Microsoft, which is chiefly concerned about protecting and enhancing its Internet search-advertising pact with Yahoo! While Microsoft is less likely to make another run at Yahoo!, it could help bankroll private-equity firms’ buyout efforts, the Journal reported.
Suitors have been lured by the enormous audience Yahoo! Internet properties attract. Websites owned by Yahoo! see almost 700 million visits a month around the world, the Journal said.