Initial Bids Seen For Minority Stake in Yahoo, Fair Value is $17
With private-equity firm Silver Lake along with Microsoft (NASDAQ:MSFT) bidding $16.60 per share for a roughly 20% stake in Yahoo (NASDAQ:YHOO), [1] the company seems to be shaking off the prospects of a complete takeover for now. Having said that, Alibaba’s interest in Yahoo has not diminished just yet, and the former would be on the look-out for a complete buyout if Yahoo does not deem the minority bids sufficient.
See our full analysis for Yahoo’s stock here
PE Firms Seem Comfortable With Minority Stake
- Yahoo Price Estimate Revised To $50 As Company Commences $3 Billion Buyback
- Yahoo Earnings: Revenue Decline Continues As Deal For Core Business Closes In June
- Yahoo Earnings Preview: Revenue Set To Decline As Slide In Ad Revenues Continues
- Yahoo Earnings: Slide In Core Advertising Derails Revenue Growth Once Again
- Should Verizon Continue To Pursue The Yahoo Deal?
- Yahoo Earnings: Search And Display Revenue Growth Continues To Elude The Company
While earlier speculation was that a complete take-over of Yahoo was on the cards, founder Jerry Yang never seemed keen on letting go of the company’s entire assets. However, a minority stake in Yahoo would enable the winning bidder to have a strong say in the company’s management and operations, which is probably the single-largest factor for Yahoo struggling in the online advertising market. No wonder there are rumors that Marc Andreessen might become Yahoo’s future chairman. [2]
Alibaba on the other hand, is not expected to let go that easily. The Chinese e-commerce giant is already mulling a complete take-over of Yahoo and would definitely be aggressive in getting back its own stakes that Yahoo owns, which constitutes almost 40% of Yahoo’s total value by our estimates.
We have a price estimate of $17 for Yahoo’s stock, which is around % above the current market price.
Understand How a Company’s Products Impact its Stock Price at Trefis
Notes: