Microsoft and Silver Lake Submitting A Plan To Buy Minority Stake In Yahoo!

Posted Nov 28, 2011

A consortium of investors that are being led by Microsoft Corporation (NASDAQ:MSFT) and Silver Lake are submitting a plan to buy a minority stake in Yahoo! Inc. (NASDAQ:YHOO). TPG Capital is another company that will be making a proposal for Yahoo! Both of these proposals would lead to taking a stake of around 20% of the company.

Yahoo!’s financial advisers Allen & Company and Goldman Sachs Group, Inc. (NYSE:GS) made the end of the business day on Monday as the deadline for minority stake offers according to a source with The New York Times.

After turning down the acquisition offer from Microsoft a couple of years ago, Yahoo! seems to be less interested in selling themselves as a whole. After an investor buys a 20% stake in the company, Yahoo! would then take on debt to finance a stock buyback.

Jerry Yang and David Filo holds roughly a 10% stake in the company. The board may consider a bid for the entire company if it is strong enough and if the terms are appealing enough.

Some of the other investment companies that are reportedly a part of the consortium includes Andreessen Horowitz, Kohlberg Kravis Roberts, THL Partners, and Hellman & Friedman.

Yahoo! partner company Alibaba Group of China is discussing a possiblity with the Blackstone Group about making a bid to buy the company as a whole. Yahoo! Inc. currently owns 40% of Alibaba so this would be a way for the Chinese company to get the stake in their company back.