Yahoo to prepare new shortlist of bidders for core net assets
10 June 2016
Yahoo will put together new shortlist bidders for its core internet assets after several parties, including Verizon and AT&T, made second-round offers, according to people familiar with the matter.
The fact that Verizon's offer was at the low end of those received, despite the synergies it could benefit from due to its ownership of media unit AOL, is being seen to boost prospects of AT&T and other bidders in the auction.
No committed financing was required for second-round bids, and Yahoo would put together, over the coming days, a new shortlist of bidders from which it would solicit binding offers, the people said.
Earlier yesterday, CNBC reported citing sources that Verizon's bid of over $3.5 billion was topped by multiple offers at or above $5 billion. The parties that made the higher offers were not named in the report.
According to one of a Reuters source, a group led by a founder of Quicken Loans, Dan Gilbert, and backed by Berkshire Hathaway chairman Warren Buffett had also submitted an offer.
While a number of firms opted out of the race over concerns about whether Yahoo's internet assets would be viable as a standalone business, TPG Capital and a consortium of Bain Capital Private Equity and Vista Equity Partners Management made offers, according to the sources.
Meanwhile, The New York Post reported that though Verizon might be lagging the rest, it still enjoyed significant advantages over rival suitors, citing sources close to the situation.
The telecom giant, led by chief executive Lowell McAdam, could reap operational synergies that would allow it to cut more costs than private equity bidders could and submit a higher bid in the end, according to insiders.
Compared with private equity firms, Verizon also enjoyed a bigger cash hoard, according to analysts, which could become a significant factor, as second-round bids did not include committed financing.
''You have to decide if you take the risk that they don't complete the deal or get spooked,'' one insider noted, which represented Yahoo's dilemma as it reviewed private equity bids that be higher than Verizon's.
The source noted that a Verizon bid would be safe from a financing standpoint.