By AMIR EFRATI And JOANN S. LUBLIN
Yahoo Inc. has been contacted by potential bidders for some or all of the 16-year-old Internet company, even as it focuses on stabilizing executive ranks and bolstering its online-ad business to compete with rivals, people familiar with the matter said.
Executives at private-equity firm Silver Lake have called Yahoo directors about a possible deal, but Yahoo hasn't met with the firm, one of the people familiar with the matter said. It wasn't clear precisely what Silver Lake proposed.
To potential suitors, Yahoo is signaling that it is under no pressure to make a deal quickly, a person familiar with the situation said.
Silver Lake and Yahoo spokeswomen declined to comment.
At a regularly scheduled board meeting on Wednesday, Yahoo directors discussed the company's internal operations under interim Chief Executive Tim Morse, said the people familiar with the matter. Mr. Morse succeeded Carol Bartz last week after the 63-year-old was fired by the board.
No major decisions were made about the future of the company at the board meeting, one of the people said.
Directors also discussed the possibility of shifting the company's investor base or making strategic acquisitions, a person said.
A focal point of board discussions are Yahoo's Asian holdings—a 40% stake in China-based Alibaba Group Holding Ltd. and a 35% stake in Yahoo Japan—which represent one-third to one-half of Yahoo's overall value, according to analysts from B Riley & Co. and Stifel Nicolaus & Co. Yahoo has a market capitalization of about $18 billion.
Some private-equity firms that are considering whether to pursue a deal for Yahoo have indicated privately they wouldn't make a play for the company unless its Asian assets were sold, making Yahoo smaller and easier to purchase.
But Yahoo's board believes there are potential suitors who would be interested in acquiring the entire company, a person familiar with the matter said.
Directors have ruled out a spinoff of Yahoo's Asian assets into a separate holding company because the Securities and Exchange Commission would likely oppose it, as Alibaba's finances are largely undisclosed, a person familiar with the matter said.
Yahoo has spent months looking at ways to increase the value of its Asian assets or a sale of its stakes, people familiar with the situation have said. Such discussions have been complicated by the tax consequences of any sale and disagreements with Alibaba over the value of the Yahoo's stake in the Chinese e-commerce company, among other things, the people said.
Meanwhile, activist investor Daniel Loeb, whose Third Point hedge fund last week disclosed holding more than a 5% stake in Yahoo, continued to blast Yahoo's management this week, calling for Yahoo's directors to step down. The company's board isn't worried about such agitation and won't try to block Mr. Loeb from obtaining more shares, people familiar with the matter said.
—Gina Chon and Jessica E. Vascellaro contributed to this article.
Read more: http://online.wsj.com/article/SB10001424053111904491704576572751814111940.html#ixzz1Y2nB2qgr
Regardless of who follows Bartz, Sinha said the next CEO must focus on reinvigorating employee morale and updating technology. “[Yahoo] employees have been disheartened for the last four years,” he said. “There are so many fast-growing companies out there that tech employees can leave and get a job anywhere. They need to stop the exodus of people leaving Yahoo.” But he emphasized that breathing new life into a tech company past its prime has not proven to be an easy path. Numerous CEOs have tried—and failed—to revive Yahoo. Meanwhile, at competitor AOL, CEO Tim Armstrong is struggling through his own company’s rehabilitation. EBay is the rare company with a turnaround success, which was largely thanks to PayPal, Sinha said.
Continue Reading >“We are initiating coverage…with a Buy rating and a 21 price target. We believe the next 12 to 18 months should provide a win-win situation for investors: Either the management team will turn this company around, or the mounting investor discontent will force management to take steps to unlock value in its assets.”
Continue Reading >