Silver Lake considering Yahoo bid, report says

The investment firm is one of potentially several companies that could be planning to acquire Yahoo.

Don Reisinger
Former CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
3 min read

Yahoo has been contacted by investment firm Silver Lake Partners about a potential acquisition bid, the Wall Street Journal is reporting, citing anonymous sources.

According to the Journal, executives from Silver Lake are currently lining up a deal for Yahoo, though the companies have yet to actually meet and discuss the planned proposal. In a separate report from Bloomberg last night, the publication, citing sources, reported that Silver Lake's plan involves liquidating Yahoo's Asian assets, and then focusing on the firm's core business elsewhere around the world in the hopes of potentially finding a new buyer.

Silver Lake is a powerhouse in the tech-investment field. And it's certainly no stranger to major acquisitions and sales. In 2009, for example, Silver Lake, along with other, minor investors, acquired eBay's ailing Skype division for approximately $2 billion. Earlier this year, the investment firm agreed to sell Skype to Microsoft for $8.5 billion.

All told, Silver Lake has more than $14 billion in assets, according to the company's Web site. Aside from Skype, it holds investments in Seagate and Ameritrade, among others.

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Yahoo might be in a prime position to be acquired. The online company earlier this month fired its CEO Carol Bartz, citing disappointing performance. Yahoo board chairman Roy Bostock announced at the time that CFO Tim Morse would take over the company as interim CEO until a new chief executive is hired.

However, the Wall Street Journal's sources say that the board's priority right now might not be finding a new CEO. In fact, the Journal's sources claim the board met on Wednesday and the directors have made selling all or part of Yahoo its most important focus going forward.

Yahoo's board doesn't have the greatest track record when it comes to accepting buyout offers. In 2008, Microsoft offered to acquire Yahoo for a whopping $44.6 billion. However, the Yahoo board declined the offer, and eventually, the companies could only agree on a search pact.

In a note to the Yahoo board last week, Daniel Loeb, the CEO of investment adviser Third Point, a major shareholder in Yahoo, cited that blown deal as a key reason the online company's board is unfit for duty.

"It is also now widely recognized that the board made a gross error in turning down the $31 per share Microsoft bid in 2008, which would have generated significant returns for Yahoo's shareholders," Loeb wrote. "This mistake is all the more frustrating given Yahoo's current depressed stock price of $13.61 per share--far below the company's intrinsic value."

Yahoo shares closed the day at $14.89 yesterday.

Based on that stock price, a host of investment firms are ostensibly seeing value in Yahoo. Aside from Silver Lake, All Things Digital reported earlier this week that investment firm Andreessen Horowitz was also considering acquiring all or part of Yahoo. Former News Corp. president Peter Chernin with Providence Equity Investors is also considering a buyout.

Neither Yahoo nor Silver Lake immediately responded to CNET's request for comment.