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Alibaba Consortium Looks to Buy Yahoo: Report

NEW YORK (TheStreet) - Alibaba, Softbank, The Blackstone Group (BX)and Bain Capital are reportedly in advanced talks to make a bid on all of Yahoo! (YHOO), according to Bloomberg, which cited unnamed sources.

The news continues a frenzied Wednesday as earlier reports indicated that Silver Lake and a consortium of investors are bidding for a minority stake in the company that would value shares at $16.60 each.

Yahoo!'s board, which is meeting Wednesday to discuss the offers it's received, would seem to have plenty of options to sift through. Bloomberg also said that TPG Capital, another private equity firm rumored to be participating in the Yahoo! sweepstakes, may have submitted a higher bid than Silver Lake.

The newest rumor of an Alibaba-led consortium should be no surprise. The company's founder Jack Ma has openly expressed his interest in buying back Yahoo's 40% stake in Alibaba, while Softbank has said it wants to purchase Yahoo!'s 35% stake in Yahoo Japan. Blackstone and Bain would participate in the bid to pick up Yahoo's remaining U.S. operations, the sources told Bloomberg.

The report also said Alibaba could partner with other private equity firms like Providence Equity Partners, or it could resist bidding entirely.

Yahoo! shares spiked nearly 5% higher in after-market trading to $16.48.

"A 20% private equity investment would complicate things even more," said Herman Leung an analyst with Susquehanna Financial Group about the rumors of a minority sale earlier in the day. He added, "It doesn't really solve what investors are hoping for the most, which is monetization of their Asian assets."

A full company sale may lead to a higher bid than the $16.60 that's been put on the table by Silver Lake, Bloomberg said.

Yahoo! shares have risen this week as deal rumors have surfaced at a maddening pace. Nevertheless, the company's shares have fallen over 5.5% year to date and are still roughly half of their value prior to the 2008 financial crisis.

Speculation about Yahoo!'s fate began in earnest when the company ousted Carol Bartz as CEO in early September and hired investment bankers to undertake a strategic review of its options.

-- Written by Antoine Gara in New York

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