Yahoo investors stand by amid speculation of $25bn bid from Chinese partner

A$25bn bid for Yahoo would be one of the biggest buyouts of all time, but the finance could be tricky

New York

Investors in Yahoo are once again betting on a takeover of the ailing internet pioneer, amid speculation that private equity groups are planning to back a bid from the company's Chinese business partner Jack Ma.

Reports that Bain Capital and Blackstone were considering financing a $25bn (£16bn) takeover helped push Yahoo shares to a six-month high at one point, though Mr Ma said he had not decided to launch a bid and analysts questioned the feasibility of the deal.

A full bid for the company is just one in a string of ideas on the table for Yahoo's future, almost three months after it fired its chief executive, Carol Bartz, and launched a strategy review.

Elements of Yahoo's board are believed to favour taking a smaller strategic investment from a consortium of technology industry players, though that could anger existing shareholders who would see their holdings diluted a takeover premium dashed.

If Yahoo pursues that path, it will be the second time in four years that hopes of a takeover come to naught. In 2008, when Yahoo shares were double their present value, Microsoft made a $46bn offer only to be rebuffed by Yahoo's board.

Yahoo owns 40 per cent of Jack Ma's Chinese internet company Alibaba, and Mr Ma has made no secret of his desire to buy back that stake. Yahoo also owns 35 per cent of Yahoo Japan. Softbank, a Japanese internet group with stakes in Yahoo Japan and Alibaba, is considering joining the takeover consortium with Mr Ma, Blackstone and Bain.

Jerry Yang, Yahoo founder and board member, is also said to be trying to find financing for a bid, which would have to be pitched at about $20 per share to gain approval, analysts said. After initially spiking above $16.70, Yahoo shares pared some of their gains to trade at $16.20 at lunchtime in New York.

Convincing private equity buyers to make a full bid for Yahoo and finding banks to finance the transaction could both be tricky, BGC Partners technology analyst Colin Gillis said. At $25bn, it would be one of the biggest buyouts of all-time, with large amounts of debt piled on a company whose competitive fortunes have ebbed in recent years. Yahoo has lost market share to Google and Facebook, both in the amount of time internet users spend on its sites and in the amount of money advertisers spend. "Yahoo is not the perfect target for private equity," Mr Gillis said. "It is not a consumer staple stock. It is always just one click away from being wiped out."

Microsoft, which later merged its search advertising business with Yahoo, is now part of a consortium bidding for a less-than-20 per cent slice of its rival-turned-partner. That consortium, led by Silicon Valley venture capital group Silver Lake Partners and Andreessen Horowitz, led by Netscape founder Marc Andreessen, would pay $16.60 per share and help choose the new Yahoo chief executive.

Another consortium, led by private equity firm TPG, bid more than $17 per share, it is believed, but some members of the board favour the Silver Lake despite its lower value, citing the strong connections of the players involved.

News
people
Arts and Entertainment
Game Of Thrones
Uh-oh, winter is coming. Ouch, my eyes! Ygritte’s a goner. Lysa’s a goner. Tywin’s a goner. Look, a dragon
tvSpoiler warning: The British actor says viewers have 'not seen the last' of his character
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave long-running series
Sport
Esteban Cambiasso makes it 3-3
premier league
PROMOTED VIDEO
Sport
The Etihad Stadium, home of Manchester City
premier leaguePlus updates from Everton vs Palace
News
people'I hated him during those times'
News
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Sport
Heskey's aim has improved since the end of his English football career

Long after his career in English football has ended, Emile Heskey's impotency in front of goal remains an object of ridicule.

News
i100
News
Dame Vivienne Westwood has been raging pretty much all of her life
peopleFirst memoir extracts show she 'felt pressured' into going out with the Sex Pistols manager
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Lauryn Hill performing at the O2 Brixton Academy last night
musicSinger was more than 90 minutes late
Sport
Lewis Hamilton in action during the Singapore Grand Prix
Formula OneNico Rosberg retires after 14 laps
News
i100
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Arts and Entertainment
tvReview: 'Time Heist' sees a darker side to Peter Capaldi's Doctor
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam