Yahoo's Asian promise is mulling a $25bn bid for internet portal

AILING INTERNET GIANT Yahoo could get a bid in the region of $25bn from a consortium that includes Alibaba Group.

Yesterday Yahoo received a bid from a Silver Lake-led consortium that included Microsoft for a minority stake, which valued the firm at $20bn. Now a second consortium led by Blackstone Group and Bain Capital that includes Alibaba Group is expected to make a $20 a share bid for the whole company, which would value Yahoo at $25bn.

Microsoft's interest in Yahoo looks to be primarily to keep its search agreement going rather than controlling the whole company. However the Blackstone and Bain bid could be for the whole firm, as one of the consortium members, Alibaba Group wants to buy back the 40 per cent of its own company that Yahoo owns.

Although Yahoo doesn't have much to shout about, its 40 per cent stake in Alibaba Group's Asian operations is one of the firm's jewels. The problem is that unlike Yahoo, Alibaba is seen as a growing business, so it is not surprising that it wants to buy back Yahoo's equity stake.

Whether Alibaba Group will go it alone to buy Yahoo is still up in the air. Alibaba Group spokesman John Spelich told Reuters, "Alibaba Group has not made a decision to be part of a whole company bid for Yahoo."

It is highly unlikely that the bidding war for Yahoo will reach anywhere near the $30-plus per share level that Microsoft offered back in 2008, however in the space of two days, it seems that the company's perceived value might have grown by $5bn. µ