NEW YORK (TheStreet) -- Yahoo! (YHOO) stock is falling by 1.73% to $36.88 in late-morning trading on Wednesday, as telecommunications giant AT&T (T) has made a bid for its core Internet business, sources told Bloomberg. 

As of last month, AT&T had decided against making an offer. But the company remained involved in the process through its stake in digital advertising business YP Holdings, which expressed interest in merging with a subsidiary spun out of Yahoo!'s core business. 

YP is no longer pursuing such a deal, Bloomberg adds.

Yahoo! began a review of its options in February, as investor pressure mounted following the company's failed turnaround efforts. 

Verizon Communications (VZ) is widely considered the frontrunner in the bidding process, but the company did not submit one of the highest first-round bids, according to Bloomberg. 

Other bidders have reportedly included TPG and a consortium led by BainCapital and Vista Equity Partners.

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of B-.

Yahoo!'s strengths such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins are countered by weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

You can view the full analysis from the report here: YHOO

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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