by : http://biz.thestar.com.my/news/story.asp?file=/2011/11/30/business/9998734&sec=business
NEW YORK: Thomas H. Lee Partners (THL) is interested in buying the US operations of Yahoo Inc, breaking away from other bidders that are for now eyeing either a minority stake or teaming up with the Internet giant's partners in Asia, sources said.
THL was hoping to do a leveraged buyout of Yahoo's US business which could be worth US$5bil to US$6bil and draw on its experience running other media assets such as Nielsen Co, Clear Channel and Univision to turn around the ailing company, the sources said.
In taking this approach, THL was charting a different path than other private equity firms such as Silver Lake, KKR and TPG, which were expected to put in bids for a stake of up to 20% in the company, sources said.
Microsoft Corp was helping to finance a possible Silver Lake investment in Yahoo, which had a market value of about US$19bil, the sources said. Another group of firms, including Blackstone Group, Bain Capital and Hellman & Friedman, was in talks to team up with China's Alibaba Groupand Japan's Softbank Corp, they said.
Another twist: Bidders are jockeying for the best position to eventually forge a deal for Yahoo, betting they can turn around the company’s fortunes with better management.— ReutersAny deal for Yahoo is still some time away. But THL's interest adds yet another twist in the behind-the-scenes maneuvering as bidders jockey for the best position to eventually forge a deal for Yahoo, betting they can turn around the company's fortunes with better management.
The Internet pioneer has seen growth stagnate in recent years due to competition from the likes of Google Inc and Facebook, and is currently without a permanent chief executive officer as it tries to regain relevance in the new dotcom era.
Yahoo's board fired CEO Carol Bartz in September and started the strategic review, which has been complicated by the different agendas of players with a say in the situation, including its Asian partners, co-founders Jerry Yang and David Filo, the board and shareholders.
Yahoo, THL, Microsoft, Blackstone, KKR and Silver Lake declined to comment. The other private equity firms were not immediately available for comment.
Several other parties including THL were expected to sign confidentiality agreements later this week which would give them access to Yahoo's financial information, the sources said. TPG, KKR, Silver Lake and Microsoft have already signed confidentiality agreements with Yahoo over the last few weeks allowing them to prepare offers for a minority investment in Yahoo.
Their investment could come in the form of a private investment in public equity (PIPE) transaction. PIPE investors typically received stock at a discount to the public market valuation, so price could prove to be a sticking point in a deal, especially when the board might have other options before it, the sources said.
The board “is going to make decisions on how to pursue a PIPE deal,” one of the sources said, adding that the company and the suitors had different value expectations.
Keeping the initial investment below 20% would allow Yahoo to avoid putting the proposal up for a shareholder vote.
“Yahoo has to decide whether they need to cram it down shareholders' throats,” the source said. - Reuters
