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Yahoo could soon be owned by YP Holdings, until recently the owner of the iconic Yellow Pages, the massively thick phone book that used to be delivered on American doorsteps annually for free.
Yahoo is seeking a buyer for some or all of its assets and bids are due by the end of Monday. Verizon is supposed to be among the more serious of bidders and now the owner of Yellow Pages is too, according to Bloomberg,
YP, which now owns Yellowpages.com and several more digital assets, is 53 percent owned by Cerberus Capital Management and 47 percent owned by AT&T via a 2012 deal that valued the company at $1.5 billion.
On Monday, Yahoo’s market capitalization was $34.6 billion, though analysts figure that once its stakes in Yahoo Japan and Alibaba are stripped away, the rest of Yahoo is worth $5 billion, perhaps less, and that’s the portion YP might bid on.
Bloomberg says YP might want to acquire Yahoo via a “Reverse Morris Trust,” which would make the transaction a tax-free transfer of assets.
Yahoo, led by CEO Marissa Mayer, had been trying to turn around its fortunes in recent years, but said nearly two months ago it would explore “strategic alternatives” for the company.
It was unclear on Monday whether Daily Mail & General Trust, owner of the U.K. newspaper Daily Mail, was submitting a bid, with observers saying a possible play would most likely come with partners. A spokesman declined to comment.
A Verizon spokesman also declined to comment, but bankers said the company was one of the few locks in the auction.
Among the private equity firms that have been hanging around the auction to consider a bid, possibly with strategic partners, are TPG Capital, KKR and Silver Lake Partners.
Meanwhile, one source said that Time Inc. decided not to make an offer for Yahoo, a once-dominating search firm that practically invented online advertising. A representative for the company wasn’t available for comment, but a Wall Street source said word was that the company behind such magazine brands as Time, Entertainment Weekly, People and Sports Illustrated had felt that Yahoo’s financial trends makes a turnaround difficult.
It is unlikely that AT&T, Comcast, CBS, 21st Century Fox and some others who had been kicking the tires on Yahoo will actually submit bids by Monday’s deadline, according to insiders.
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