Bloomberg News

Silver Lake Said to Work With Microsoft on Bid for Yahoo Stake

November 29, 2011

Nov. 28 (Bloomberg) -- Silver Lake, a private-equity firm, is working with Microsoft Corp. to bid for a minority stake in Yahoo! Inc., people familiar with the matter said.

Andreessen Horowitz, a venture-capital firm, is also weighing a possible bid for Yahoo and hasn’t decided whether to join the Silver Lake-led group, said another person, who asked not to be identified because the deliberations are private. Yahoo’s advisers have asked that bids be submitted this week, two other people said last week.

Microsoft, rebuffed in a 2008 attempt to buy all of Yahoo, would join other investors to safeguard its Web-search partnership with Yahoo and bridge any financing gap a buyout would require, people have said. Yahoo, based in Sunnyvale, California, is exploring strategic options after firing Chief Executive Officer Carol Bartz amid deepening competition with Google Inc. and Facebook Inc.

Private-equity firm TPG Capital also has signed a non- disclosure agreement to size up a possible bid, people close to the company have said. Yahoo has asked interested parties to sign the NDA to receive management presentations and more access to confidential financial information.

Yahoo shares gained 1.7 percent to $15.35 at the close today. Microsoft, based in Redmond, Washington, climbed 2.4 percent to $24.87.

Microsoft’s Interests

Microsoft forged a 10-year agreement to provide search- technology to Yahoo sites under Bartz. The deal was aimed at helping both companies vie with Google, the leader in U.S. search-related advertising.

KKR & Co. and Blackstone Group LP are among the private- equity firms considering possible bids for Yahoo, people with knowledge of the matter said last month.

Alibaba Group Holding Ltd., China’s biggest e-commerce company, has said it’s interested in acquiring Yahoo, in part to buy back a stake the company owns. With a holding of about 40 percent, Yahoo is Alibaba’s biggest investor.

Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.

The New York Times previously reported that Silver Lake is working with Microsoft to submit an offer for a stake in Yahoo.

--With assistance from Serena Saitto in New York. Editors: Tom Giles, Elizabeth Wollman

To contact the reporters on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net; Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net.

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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