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Yahoo ( YHOO ) is facing interest from as many as 40 groups and has set an April 11 deadline for any preliminary bids on its core Internet business and Asian assets, according to media reports Tuesday. Yahoo is sending letters asking suitors for bids, said a report in the Wall Street Journal. Bidders reportedly are being pressed on financing details along with conditions for a deal, including tax implications for separating Yahoo’s Alibaba Group ( BABA ) and Yahoo Japan assets from the core. Some buyers may be only interested in Yahoo’s core Web business in whole or in pieces, the report said, and some might bid for Yahoo’s 15% stake in China e-commerce giant Alibaba or Yahoo’s holdings in Yahoo Japan. Yahoo wants to thin the field to serious potential buyers, the WSJ said. Yahoo is under pressure to get an auction process moving before this summer, when its shareholders will vote on whether to sweep out Yahoo’s current nine-member board and replace them with a slate proposed last week by activist investor Starboard Value. The hedge fund launched a proxy battle after criticizing Yahoo’s financial performance and slow movement toward a sale. Meanwhile, “any bids for Yahoo’s core business will show a discounted price target, and may not want to include Yahoo Japan assets if it’s from a domestically focused company,” wrote Rosenblatt Securities analyst Martin Pyykkonen in an industry note Tuesday. He added that “potential private equity buyers would seek a lowball price, with the plans of splitting the company even more so than just the core Yahoo assets from the stakes in Alibaba and Yahoo Japan.” This week, reports said Microsoft ( MSFT ) might put up “significant” financing in a bid for Yahoo. Microsoft executives are in talks with potential investors about providing funds to buy the troubled Internet company , Re/code reported. A Reuters report said those talks are in the early stages. Microsoft and Yahoo have a longstanding search and ad partnership, and Microsoft is focused on preserving that relationship, it said. Private equity firms interested in Yahoo have approached Microsoft, Reuters said. In 2008, then-Microsoft CEO Steve Ballmer tried to buy Yahoo for about $45 billion. But Yahoo’s core business has since weakened, Pyykkonen wrote. “Fast forward to today, and there are declining fundamentals in Yahoo’s core business, which include user and usage year/year declines and a write down of a portion of Yahoo’s Tumblr business,” he said, as Facebook ( FB ) and Alphabet ( GOOGL )-unit Google both have more revenue concentration from mobile advertising. “Based on yesterday’s closing prices, Yahoo’s core business and its minority stake in Yahoo Japan were valued at $3.43 billion, based on the majority of Yahoo’s market cap being in its Alibaba stake (16% = $30 billion). We see any potential sale of Yahoo’s core business as being a long and protracted process (due diligence, price negotiation, proxy battle, etc.) through much of this year and with limited upside, if any, from the current stock price,” said Pyykkonen. Yahoo stock was up 2.5% in midday trading in the stock market today , near 36. Shares of Alibaba, Facebook, Alphabet and Microsoft were all up about 1% midday Tuesday. Scalper1 News
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