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Low Bids For Yahoo Stake

  • Bloomberg, Wednesday, November 30, 2011 11:57 AM

The first bids for a minority stake in Yahoo are in -- and they’re not great. A group of investors led by private-equity firm Silver Lake offered to buy a minority stake in Yahoo for about $16.60 a share, reports Bloomberg, citing sources. Silver Lake’s bid values Yahoo at $20.6 billion, or about 6% higher than its market value at yesterday’s close.

Silver Lake -- and with Microsoft, venture-capital firm Andreessen Horowitz and Canada Pension Plan Investment Board -- offered to buy convertible preferred securities equal to a 10%-to-15% stake for as much as $3 billion, according to one source. “The price was lower than an offer made by private-equity firm TPG Capital,” Bloomberg writes. “The offer is disappointing,” Hamilton Faber, an analyst at Atlantic Equities, tells Bloomber. “Investors who’ve been buying Yahoo recently were hoping for a significant premium and a takeout of the full company, and this falls short on both counts.”

Under Silver Lake’s proposal, Yahoo would be able to distribute at least $5 billion to shareholders in the form of a special dividend or a share buyback, a source tells Bloomberg.

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