Yahoo ready to collect final bids as auction nears its end
Final bids for the services, which include Yahoo’s search, email, advertising and media operations, are due Monday, with the board set to make a decision soon afterward, according to people briefed on the process who asked for anonymity because the bidding is confidential.
The Sunnyvale company has conducted several rounds of bidding since February, when it announced that it would explore a sale to separate its struggling operations from its much more valuable investment stakes in two Asian Internet companies, Alibaba and Yahoo Japan.
The process was eased this spring when the company settled a dispute with a persistent critic, hedge fund Starboard Value, giving the activist investor four board seats.
The bidders for Yahoo’s operations include Verizon Communications and AT&T, several private-equity firms and Quicken Loans co-founder Dan Gilbert, who is getting financial backing from Warren Buffett’s Berkshire Hathaway.
The offers are expected to vary depending on what assets are included, but Wall Street expects the business to be sold for an estimated $6 billion, including intellectual property and land.
Some of the private-equity firms plan to curtail costs sharply while working out ways to profit from Yahoo’s still sizable audience.
Yahoo will report its second-quarter financial results Monday, and analysts expect the company to post significant declines in revenue and profit.
In a 2014 deal, Yahoo promised to pay Mozilla at least $375 million a year to make Yahoo the default search engine on Firefox — about $100 million a year more than Google was then paying for similar prominence, according to Yahoo and Mozilla filings.
Yahoo decided the Mozilla contract provisions were not significant enough to disclose to shareholders, despite a series of letters last year from the Securities and Exchange Commission asking the company to lay out the terms of the agreement and the risks to Yahoo.
Denelle Dixon-Thayer, the chief legal and business officer of Mozilla, said she could not discuss specific terms of the Yahoo contract because of a confidentiality clause, but she acknowledged that Mozilla had protected itself from “downside risk.”
Brian Wieser, an analyst for Pivotal Research, estimates that Yahoo’s operating business is worth $3.5 billion, but he said that whatever the final price, the sale would have little effect on the stock price, which has risen on speculation of a deal.
How will the remaining stub of Yahoo make money from its 15 percent stake in Alibaba, the Chinese e-commerce company with a face value of $31 billion, and its 35.5 percent stake in Yahoo Japan, worth about $9 billion?