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Yahoo Board Wants $10 Billion For Company's Core Business: Report

26 March 2016, 7:02 am EDT By Quinten Plummer Tech Times
Yahoo is asking $10 billion for its core business, at least $2 billion more than most valuations of it. But Microsoft may make the acquisition of Yahoo more palatable for suitors.  ( Stephen Lam | Getty )

Microsoft is willing to offer "significant financing" to a company that's willing to buy Yahoo's core business, which is up for sale for $10 Billion.

While Yahoo CEO Marissa Mayer still stands behind her turnaround effort, digging both feet into stomping it and its message, Yahoo Chairman Maynard Webb made it clear that the company, in addition to acting on Mayer's plan, will add "additional strategic alternatives."

While many potential buyers and pundits may not be convinced Yahoo is serious about the sale, Microsoft, which powers Yahoo's search with Bing, is making a play to help a potential deal along.

Microsoft has been in talks with several private-equity firms that might have an interest in purchasing Yahoo's core of advertising, search and web services, according to a Re/Code report.

These are only "exploratory" talks so far. Microsoft hasn't committed to assist any particular suitor in buying Yahoo.

For Microsoft's part in all this, it is investing in its own future and hoping to ensure that any company that buys Yahoo will be a good partner, according to the report.

"If Microsoft put in a billion, it would cost them almost nothing," one investor, who spoke to Microsoft, relayed to Re/Code. "It's a minor thing and it buys them a lot."

Microsoft's support could go a long way in helping a buyer secure a company that's wearing a $10 billion price tag, about $2 billion to $4 billion more than many analyst value Yahoo's core business.

While Mayer has balked at and bucked against the idea of a sale, some analyst now believe a buyout is a foregone conclusion after Yahoo investor Starboard Value nominated a new roster of director to replace Yahoo's current board.

Among the reasons it listed for looking to oust Yahoo's current board members are the struggles the company, valued at more than $30 billion in total, has had in separating its core business from its stake in Alibaba and Yahoo Japan.

"Unfortunately, it appears that shareholders have no confidence that management and the Board will be able to execute on a separation of these assets or improve the performance of the Core Business," writes Starboard in a letter to Yahoo. "We are confident that both of these objectives are achievable, but will require a change in leadership and strategy.

The ousting of Yahoo's board of directors would clear the way for Starboard to be involved in a "full and fair sale process," according a letter sent from Starboard CEO Jeffrey Smith to other Yahoo shareholders.

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