With the sale of Yahoo! Inc. (NASDAQ:YHOO)’s core business yet to be finalized, a new group has entered the fray and wants to buy the company. AT&T Inc. (NYSE:T) is believed to be interested in buying the Internet Company according to sources close to the matter.
The company which reportedly had withdrawn from making any bid back in April when the initial bidding process began, kept themselves in the race for the core internet business of Yahoo through its partner in the digital advertising business YP Holdings LLC. The company had proposed that the two merge and make a subsidiary out of the Yahoo core business. YP has however decided not to pursue the transaction anymore according to several people who all refused to be named because of the private nature of the matter.
Before the close of day, Yahoo shares fell 5 percent to close at $35.59. AT&T had not changed much closing at $38.62.
The presence of AT&T in the bidding process makes it come up against its telecommunications rival, Verizon Communications Inc., a company that has been like the best placed to win the bid to buy Yahoo Internets business. Two of the people who were close to the matter, however, said that Verizon might have been the frontrunner, but they didn’t give the best bid in the first round.
All representatives from AT&T, Verizon, and YP Holdings all refused to comment on the issue.
AT&T is based in Dallas and has $237 billion for its market capitalization which makes it possible for them to compete in any auction. The company might pair the algorithms which are used by Yahoo in advertisements and pair it with its mobile service platform. The service was launched last year after the company bought DirecTV for $48.5 billion. The company also has a joint venture with the Chernin Group which is called Otter Media, a company that is known to invest in digital media.
AT&T may need the Yahoo business so that it can stand up to Verizon which recently bought AOL Inc. last year. Verizon has the same capabilities as those which are in Yahoo’s hands. Verizon also stands to be the best option for Yahoo because of the synergy with the AOL business owned by Verizon. This is according to the two sources close to the matter.
The financial advisers are weighing bids on the core business. They are particularly looking at companies that made higher bids. The company is reported to have received ten bids which ranged from $4 billion to $8 billion.
The process is expected to take another two to three weeks to finalize, and bidders have already had meetings with the Yahoo management so as to get information. The Chief Financial Officer Ken Goldman said the process was well and truly along the way.