Verizon Reportedly Set to Acquire Yahoo!
The Yahoo! (YHOO) auction saga may finally be over.
Re/code reported Saturday that Verizon Communications (VZ) - Get Report was close to an announcement that it would acquire the struggling Internet company for about $5 billion in cash and stock. The Wall Street Journal said Sunday that the deal was valued at about $4.8 billion and included Yahoo!'s real estate assets in addition to the core Internet business.
The acquisition would be the culmination of an auction process that began in February, after CEO Marissa Mayer failed to convince shareholders she could turn the company around.
Re/code's Kara Swisher wrote that Yahoo! will join Verizon's AOL unit. Verizon bought AOL for $4.4 billion last year to boost its digital media and mobile video offerings. A Yahoo!-AOL merger, she noted, has been floated several times over the past 10 years.
The losing bidders from the final round, Swisher reported, were private-equity firm TPG and an investor group led by Dan Gilbert, the founder of Quicken Loans. Berkshire Hathaway (BRK.A) - Get Report CEO Warren Buffett agreed to finance Gilbert's bid.
Other bidders had reportedly included Daily Mail & General Trust plc, Time (TIME) and Bain Capital LLC.
In February analysts valued Yahoo!'s core operations at between $2.2 billion and nearly $5 billion. The company's most valuable assets are its stakes in Yahoo! Japan and Alibaba Group Holdings (BABA) - Get Report .
Swisher cautioned that there are several potential hurdles. Yahoo! and Verizon would need regulatory and shareholder approval and face a difficult integration. In addition, the losing bidders -- "most likely Gilbert" -- may make counteroffers.
Yahoo!, of Sunnyvale, Calif., is set to report its quarterly earnings Tuesday. Shares rose 0.66% to $39.64 in after-hours trading Saturday. Yahoo! closed at $39.38 Friday, up 1.36%, in anticipation of an imminent deal. The company's market capitalization is about $37 billion.