Reported partners in this deal with Microsoft include private-equity firm Silver Lake Partners and Silver Lake investor, the Canada Pension Plan Investment Board. Silver Lake also recently invested in China’s Alibaba in which Yahoo! has a 40% stake.
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People familiar with the matter also said that in addition to Microsoft’s consortium looking at Yahoo!, there were at least eight other private equity firms pondering a bid on the former search titan.
Though serious talks have been held about a possible offer, with the consortium of companies even planning how the deal would be structured financially, the Journal’s people familiar with the matter said that nothing had been confirmed.
Neither Yahoo! nor Microsoft would comment on the report.
Despite this, on the back of the rumour, Yahoo!’s shares soared before dropping down to normal levels in after-hours trade.
Microsoft’s history with Yahoo! is both long and rumour-filled.
In 2008, the software giant launched a US$44.6-billion hostile takeover bid for Yahoo! which was rejected by Yahoo! founder and CEO at the time, Jerry Yang. That decision ultimately led to Yang being relieved of the Yahoo! CEO-ship. Since then, Yahoo!’s shares have lost nearly 44% in value.
Following the axing of Yahoo!’s colourful CEO Carol Bartz, who was brought in to replace Yang, rumours swirled that Yahoo! and AOL were looking to merge and a special advertising deal with Microsoft would be cut.
Although Yahoo! has struggled to capture the audiences of chief rival Google, its sites still commands some 700-million view a month, making it an attractive opportunity to shrewd investors.
