Yahoo mulling offers, but control and cash delaying decision?
The online giant reportedly has several offers on the table, but its demands and concerns are starting to weigh heavily on negotiations.
Yahoo's board has been wooing potential suitors for months, but now that it has some offers, it wants more from would-be investors, a new report claims.
According to the Wall Street Journal, citing anonymous sources, Yahoo's board has several minority-stake investment proposals in play, but has gone back to suitors, requesting a higher premium on its stock price or more attractive terms.
Silver Lake Partners, which has been rumored to have offered $16.60 per share for about a 20 percent stake in Yahoo, has been one of the firms hit with rebuttals from Yahoo, according to the Journal's sources. They claim that Yahoo's board wants a higher premium on the company's stock price, but doesn't want to give up control over the selection of its next CEO. Silver Lake, however, has said that it won't offer more cash unless it can play a part in deciding who Yahoo's next CEO will be, according to the sources.
That said, Silver Lake might not be in the best place to negotiate. Last week, when reports said that the investment firm was offering Yahoo $16.60 per share, they were accompanied with rumors that TPG Capital, another investment firm, offered about a $1 more per share. So, while Silver Lake is reportedly loath to give more cash without certain accommodations, it might have no choice if it's serious about investing in Yahoo.
But Silver Lake's troubles go far beyond TPG Capital. Over the last several months, a host of investment firms and major companies, including Microsoft and Alibaba Group, have shown interest in acquiring a stake in Yahoo.
Speaking of Alibaba Group, according to the Journal's sources, the China-based company, along with Japan's Softbank, are interested in acquiring Yahoo's Asian assets. Yahoo reportedly wants to make that move after it has chosen an investor. Alibaba and Softbank, however, want to get the deal done before the board makes its decision, the sources say.
To further complicate matters, last week, Yahoo shareholder M&C Partners III filed a class-action lawsuit against the online company in the Delaware Chancery Court, arguing that its "no cross talk provision," which bans would-be buyers from working together to formulate a deal, harms investors. M&C has asked the court to force Yahoo to rescind any offers it might accept while the provision is in place or, if it hasn't agreed to anything by the time the ruling is made, to not accept any deals until the bidding process is changed.
Despite the controversy surrounding Yahoo, buyout rumors have helped the company in one notable way: its stock price. Since former CEO Carol Bartz was fired in September, Yahoo's shares have jumped nearly 23 percent to $15.84.