Alibaba, Softbank Said to Seek Partners for Yahoo
Alibaba Group Holding Ltd. and Softbank Corp. (9984) are talking with private-equity funds about making a bid for all of Yahoo! Inc. without the company's blessing, people with knowledge of the matter said.
Context & Ripple Effects
Yahoo has been in play since early October, when buyers began weighing bids amid open questions about what the company is actually worth. Three weeks later the field widened further, with Google and private-equity firms reported to be mulling their own approach.
The new wrinkle is who is circling this time: Alibaba and Softbank, Yahoo's own Asian partners, are reportedly talking with buyout funds about a bid for all of Yahoo without the board's blessing. Jerry Yang told AsiaD in late October that the strategic review includes options beyond a sale, so an unsolicited approach would test that posture directly.
First-order effects
- Yahoo's board faces an unsolicited bidder while running its strategic review, compressing the timeline behind Yang's stated options beyond a sale.
- Alibaba and Softbank need private-equity capital to fund a whole-company offer, making fund commitments the gating item on whether a bid materializes.
Second-order effects
- Google and the private-equity firms already weighing bids must decide whether to counter a rival group whose interest is anchored in Yahoo's Asian holdings, including the rumored 35% Yahoo Japan stake under exit consideration since October.
- Yahoo's confirmed display-advertising tie-ups with Microsoft and AOL become part of any buyer's takeover math, since a winning bidder inherits those arrangements.
Third-order effects
- If the pattern holds, Yahoo's fate turns on the value of its minority stakes in Alibaba and Yahoo Japan rather than its US portal business, pushing the strategic review toward asset sales as the way to surface that value.
- Strategic partners organizing hostile bids set a precedent in which boards lose control of auction timing whenever large minority stakeholders line up financing.
The trend: Yahoo's strategic review is converging on its Asian assets as the decisive prize, with strategic holders and financial buyers competing to shape the outcome.