Verizon Communications Inc. remains to be the bidder to beat because it has the heft to ensure itself a win, according to a Wall Street Journal report.
Verizon's heft comes from its estimated market cap of $210 billion and cash of about $4.5 billion on its books. Back in February, the company announced the sale of its wireline assets to Frontier Communications for $10.54 billion in cash and cell phone towers to American Tower worth over $5 billion to raise cash for investments.
Months before the scheduled bid, about 40 companies had initially expressed interest to buy parts or all of Yahoo. Days before the preliminary bid, expected bidders like AT&T Inc, Comcast, Time Inc., Disney and Google parent company Alphabet have shown little or no interest.
With major bidders backing out, Verizon's biggest rivals may come from private-equity firms like Bain Capital, TPG and Advent International.
KKR & Co. has expressed interest but it was not known if it would join the bid. So has the British Daily Mail & General Trust, which is still in talks with private-equity companies.
The Perfect Fit
Following Verizon's recent purchase of AOL, another Internet giant, Yahoo would be a perfect match for the company's thrust for a broader advertising platform. Verizon's eye for AOL focused on the Internet company's wide portfolio of media brands, such as Huffington Post and TechCrunch. Verizon hoped to use data from its vast mobile networks to help AOL target more ads.
Buying a company with a similar portfolio of technology, media and advertising products would be a compelling next move, wrote Timothy Lee of Vox Technology. Scale has become a crucial aspect of online advertising, with advertisers preferring larger media companies over smaller ones. A Yahoo/AOL marriage would be able to command premium prices.
The future of Verizon has to include a very robust media technology company, so Yahoo would fit very well in the strategy, said Arianna Huffington, editor-in-chief of the Huffington Post, in an interview with Emily Chang of Bloomberg.
Yahoo Board Revamp: A New Twist
Yahoo and Starboard Value, an activist and minor investor, have similar intentions for a future sale of the company. Both want to sell the company for an attractive price, but if that fails, both agree to refocus its operations and the value of its Asian assets.
In a bid to prepare for a proxy battle with Starboard Value, Yahoo added two new directors to its board in early March. This and Marissa Mayer's failure to live up to her promises prompted Starboard Value to decide to overhaul the Yahoo board by nominating nine new directors at the company's shareholders' meeting this summer, the report said.
A possible upheaval at the Yahoo board could derail the sale and cast uncertainty around negotiations with potential acquirers. But Verizon seems to be unfazed as it submits its bid on April 18.
Photo: Alan Levine | Flickr
