The Strategist

Daily Mail is considering buying Yahoo!

04/11/2016 - 16:50

UK-based Daily Mail & General Trust, which owns the newspaper Daily Mail, showed up among the contenders for the purchase of assets of Yahoo! Inc., according to The Wall Street Journal, citing sources familiar with the situation.

Daily Mail & General Trust is in talks with several private equity funds. The company seeks their support for application for the acquisition of the US Internet company’s media assets. However, representatives of the two corporations have not met yet.

According to sources, there are two possible scenarios for the potential transaction. According to the first one, the Daily Mail & General Trust will acquire news and media assets of Yahoo!; all other assets of Yahoo! in the United States will come to other interested buyers. Among the American company's media assets are services Yahoo! Finance, Yahoo! Sports and News, as well as its video service.

Another scenario is that the potential buyer will acquire the basic web service Yahoo! Short, and then will single out the subsidiary’s necessary assets, including the Daily Mail in it. This option of the transaction will allow British companies to get bigger portfolio of shares, sources said.

Until April 18, Yahoo! Inc., is collecting potential investors’ preliminary bids for the purchase of the company’s main Internet business and Asian assets. The company asked potential buyers to tell about how they will finance the deal and what conditions and permits are to be obtained for its completion.

The number of bidders for Yahoo! assets comprise 40 companies, including telecommunications corporation Verizon Communications Inc., IAC / InterActiveCorp, CBS Corp., Time Inc., TPG, KKR & Co., Microsoft Corp. etc.

Some investors may be interested in only internet business, while others may make an offer to buy shares of Chinese Alibaba Group Holding Ltd. or Yahoo! Japan Corp.

April 8, Bloomberg reported that the American search engine Google is also considering purchase of Yahoo!’s Internet assets. According to sources, the main contender for the purchase is the American telecommunications operator Verizon Communications. Last year, Verizon bought Internet company AOL for $ 4.4 billion, and now is going to develop their media and advertising business. 

In IV quarter 2015, Yahoo! recorded a loss of $ 4.43 billion due to write-off cost of a number of assets, including Tumblr, acquired in 2013 for $ 1 billion. The company's revenue in October-December amounted to $ 1.25 billion, compared with $ 1.27 billion for the same period a year earlier.