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Verizon To Submit Bid For Yahoo (thestack.com)
An anonymous reader writes: Sources close to the company have confirmed that Verizon will submit a first-round bid to purchase Yahoo's web business early next week, and that they may offer to take on Yahoo Japan as well. Time Inc. and Google are said to still be considering whether or not to make an offer, while AT&T, Comcast, and Microsoft have decided against entering a bid. Verizon's willingness to take on Yahoo Japan in the bid may give it a strategic advantage over other bidders. The combined value of Yahoo web and Yahoo Japan Corp. could put the value of the bid out of range for all but the largest investors, potentially putting interested private equity firms such as Bain or TPG out of the running.
Even if they get 5 billion they'll have gotten more money in the long run than the microsoft purchase. At the time Microsoft offered to purchase Yahoo, they still had all the shares of Alibaba, something that ended up being sold for right around 40 Billion and distributed to shareholders. By that measure alone the Microsoft deal was severely undervalued.
The Yahoo Japan comment is interesting. Yahoo Japan is completely separate from Yahoo Inc -- Yahoo Inc owns 34% of Yahoo Japan, Softbank (A Japanese conglomerate and major telco in Japan) owns 41%. It's a completely independent, publicly traded entity, of which Verizon wouldn't even be getting a controlling or even largest shareholder position in.
It's an odd thing, sort of like saying "we'll buy your web, oh and also a really good investment position - we'd like that too".
Yahoo Japan is valued at ~25B USD... and Yahoo Inc is valued at ~34B USD. That would suggest that without Yahoo's 31% stake of $8.5B in YJ, Yahoo Inc would be worth less than Yahoo Japan.
It could very well be that Verizon is buying their Yahoo Japan position and taking their web business as part of the deal, rather than the other way around.
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