• The Wall Street Journal, Tuesday, April 14, 2009 11:30 AM

A Skype buyback by its founders looks increasingly unlikely, The Wall Street Journal's Peter Lattman reports, as the bid put in for the Internet telephony company came in well below the price at which eBay was willing to sell.

When founders Niklas Zennstrom and Janus Friis, who sold out to eBay for $2.6 billion in 2005, approached the online auctioneer about repurchasing Skype, eBay encouraged them to make an offer. Zennstrom and Friis rounded up a group of private equity firms including KKR, Warburg Pincus, Providence and Elevation Partners to back the bid with up to $1 billion. EBay said it would also supply financing.

However, sources told Lattman that "the two sides are far apart and at this stage a deal involving the private-equity firms is unlikely to be completed." He adds that the offer underscores how the financial crisis has hobbled the largest equity firms. Whereas they would once join forces to pay large premiums for companies, they now do so more to reduce risk, Lattman says.

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