Verizon Most Likely Yahoo ‘Savior’ But Many Interested?
Expressions of interest are pouring in from dozens of groups that are eyeing buying struggling Web portal Yahoo ( YHOO ), with Verizon ( VZ ) rumored to be the most likely acquirer, said Monness Crespi Hardt analyst James Cakmak in an industry research report on Monday. “Verizon is still the most likely savior despite potential risks, in our opinion,” wrote Cakmak, who added that more than 40 expressions of interest have been made for Yahoo and that technology-focused investment banker Frank Quattrone may be positioning embattled Yahoo CEO Marissa Mayer along with the company’s core business as a package deal. But the prospects for a private industry pair-up are low, according to Cakmak. “While we have entertained the idea of private equity previously, we no longer think it’s a realistic option given Ms. Mayer’s desire to maintain a central role,” wrote Cakmak. Monness Crespi estimates the value of Yahoo’s core assets at $3 billion to $4 billion. Yahoo has received nearly 40 expressions of interest from prospective bidders including Verizon, AT&T and Time, said a report last week in the NY Post . Mayer is under intensified pressure from major investor Starboard Value, which has urged the exit of Mayer and some directors, as well as the spinoff of Yahoo’s core search business. Yahoo directors are close to offering at least two board seats to the activist hedge fund in order to avert a proxy fight, according to the New York Post’s report. Aside from forming a committee of independent directors to explore possible transactions, Yahoo announced last week that it will bring in Goldman Sachs, JPMorgan and PJT Partners as financial advisors, along with law firm Cravath, Swaine & Moore. Another company rumored to be interested in Yahoo is Comcast ( CMCSA ). Verizon has talked up its interest in buying some Yahoo assets “at the right price,” but also said it does not want to “catch a falling knife,” referring to the state of Yahoo’s business. Rumors re-emerged last week that e-commerce giant Alibaba Group ( BABA ) might buy back a valuable stake that Yahoo now holds in the Chinese company. Yahoo’s Asian assets — comprised of its Alibaba holdings and a 35.5% stake in Yahoo Japan — represent the vast majority of Yahoo’s $32.2 billion market value. Yahoo owns a 15% stake in Alibaba, or about 384 million shares. But some observers say such a transaction is unlikely because of high tax implications for Alibaba. Analysts say Yahoo is poised to lose more ad dollars to Facebook ( FB ), Alphabet ( GOOGL )-owned Google and high-profile startups such as Snapchat and Pinterest. Yahoo stock was up 1% in midday trading in the stock market today , near 34, its highest point since late December. But concerns on the health of its core business has driven down Yahoo stock 22% since this time last year. Alibaba stock was up 2%, near 74. A Wall Street Journal report noted that the China e-commerce king’s Ant Financial Services is looking to raise up to $3 billion, pricing the subsidiary’s valuation at over $50 billion and potentially vaulting it into the Top 10 of China’s largest financial companies.