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Silver Lake and Microsoft bid for a minority stake in Yahoo

Wants to bolster existing search deal
Wed Nov 30 2011, 13:10

AILING INTERNET GIANT Yahoo is pondering an above market value offer from Silver Lake for a minority stake in the firm.

Yahoo has been looking for a buyer ever since former CEO Carol Bartz got the boot, with private equity firm Silver Lake and Microsoft the favourites to pick up the once mighty web portal. Now Bloomberg is reporting that a Silver Lake led consortium has bid $16.60 a share for a minority stake in Yahoo, valuing the firm at $20.6bn.

Silver Lake's consortium includes Microsoft, which bid in-excess of $33 a share back in 2008, when then CEO and founder Jerry Yang rebuffed Microsoft's advances. The latest offer, although for a minority stake, is believed to be an attempt to secure the 10-year search deal between Microsoft and Yahoo.

According to Bloomberg's source, Yahoo will be discussing Silver Lake's offer later today. The decision might not be clear cut, however, with Yahoo's Asian partner Alibaba Group also interested in buying Yahoo if only to buy back the 40 per cent of its equity that Yahoo owns.

The Yahoo takeover saga has overshadowed other internet acquisitions such as AOL. With Yahoo attracting such high profile bidders, a bidding war could break out, but given Yahoo's prolonged slide into web irrelevance, it is unlikely that the company will get anywhere near the $33 a share offer Microsoft laid down three years ago in a desperate bid to catch up with Google. µ


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