Verizon is planning to bid for the Yahoo core business with a second round bid of $3 billion, according to sources which are close to the matter.
Verizon is seen as one of the forefront runners for the Yahoo business and was expected to meet the Monday deadline (yesterday) for the second round bids. Yahoo is expected to hold at least one last round of bidding before they make their final decision on who should buy the company. Sources close to the matter also said that the final prices of the bids could all change as we got to the final rounds of the bidding war.
Verizon spokespersons declined to comment when contacted for comment, and the same was with the Yahoo spokesman.
In its bid, Verizon indicated that they were not interested in the patents and the real estate as part of the deal if they won the bid, according to to the people familiar with the matter. Yahoo, however, earlier this year said that they were exploring ways to sell the noncore assets as well, which include the real estate and patents that Verizon is not interested in, and the company expects to fetch $1 billion for them.
One of the bidding firms, TPG was also expected to submit a bid as of late Monday, as reported by sources close to the matter. At the moment, it was unclear whether there had been any new bids from the other suitors who had qualified in the first round of bidding. The other groups include the private-equity firms Advent International and the Vista Equity Partners, and a group that is being led by Dan Gilbert, the Quicken Loans founder. Reports indicate that not all bids will be the same as different groups will be interested km various things and therefore proposals will b put in different structures.
Reports from last month indicated that the suitors were going to bid in the second round with prices which ranged from $2 billion to $3 billion. This price is relatively lower to what the Yahoo core business was expected to fetch back in April, as it was valued at $4 billion to $8 billion. Bidders lost interest after the sales pitch by the Yahoo CEO Marissa Mayer, which was done at the company’s headquarters in Sunnyvale California. The presentations apparently showed the prospective buyers how the Yahoo ad business was in serious decline.
At the moment, Verizon is seen as the one which has the clear path to the Yahoo business. It is rumored that the telecommunications company would join the company with its growing online ads network, which would give the telecoms company an edge in the ad business and also means it can offer more than its bidding competitors.