Verizon Communications Inc (VZ.N) was set on Tuesday to
advance to the second stage of bidding for Yahoo Inc's (YHOO.O) core assets, as the U.S.
internet company went through offers to put together a short list, people
familiar with the matter said.
Verizon
submitted its offer with advice from investment banks Guggenheim Partners LLC,
LionTree LLC and Allen & Company, the people said on Tuesday. The U.S.
telecommunications company will face competition in the second round from other
companies and private equity firms, the people added.
On Tuesday
evening, Yahoo's advisers were still reviewing the preliminary offers received
on Monday. The auction attracted interest from a diverse array of companies
ranging from Japanese online retailer Rakuten Inc (4755.T) to Yellow Pages owner YP LLC, which is backed
by AT&T Corp (T.N), the people said. Rakuten ended up not making
an offer, a spokesman for the company said.
Apax
Partners LLP, TPG Capital LP, Bain Capital LLC, Apollo Global Management LLC (APO.N) and Warburg Pincus LLC were among the private
equity firms that submitted first-round bids, the people said. Yahoo may decide
to allow buyout firms to team up in the second round, the people added.
The field
had whittled down ahead of Monday's first-round bid deadline as several
companies that were mulling an offer, including Comcast Corp (CMCSA.O) and Time Inc (TIME.N), decided to opt out, the people said.
No two
offers submitted were identical, and Yahoo is deciding which proposed
structures and assets to be divested offer the best potential value, the people
said. The company hopes the auction can conclude by June, but the timing could
sleep, the people said.
Softbank
Group Corp (9984.T), which owns 43 percent of Yahoo Japan Corp,
and Alibaba Group Holding Ltd (BABA.N), in which Yahoo holds a 15.5 percent stake,
have not participated in the auction, but may engage with the U.S. company once
the future of its core internet assets becomes clear, the people said.
The
sources asked not to be identified because the details of the sale process are
confidential. Representatives of Yahoo, Verizon, YP, Comcast, Time and the
private equity firms declined to comment. Softbank, Alibaba, Guggenheim,
LionTree and Allen & Company did not immediately respond to requests for
comment.
Yahoo,
under pressure from shareholders including activist hedge fund Starboard Value
LP, launched an auction of its core business in February after it shelved plans
to spin off its stake in Chinese e-commerce company Alibaba.
Analysts
see Verizon, which bought AOL last year for $4.4 billion, as being a more
likely candidate to prevail in the auction for Yahoo's web business.
On Yahoo's
first-quarter earnings call on Tuesday, Chief Executive Marissa Mayer said
Yahoo management had been "running a quality process designed to keep
interested parties engaged."
"Over
the past two months, (Chief Financial Officer Ken Goldman) and I and the rest
of the management team have spent time in person and on the phone with
interested participants, including some of the most well-known, respected names
in the industry," Mayer said.
(Reporting
by Greg Roumeliotis and Liana B. Baker; Additional reporting by Malathi Nayak
in New York; Editing by Leslie Adler)
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