Yahoo Headquarters

 

Yahoo! Inc. (NASDAQ:YHOO) set April 11 as the deadline for potential buyers to submit their preliminary bids to acquire its core internet business and Asian assets, according to the Wall Street Journal based on information familiar with the situation.

The report suggested that an April 11 deadline means Yahoo will likely close a transaction by June or July.

The preliminary bidding process will also help the company determine the amount buyers would be willing to pay for its core internet business and Asian assets. Yahoo started the auction process for its core internet business last month after canceling its plan to spinoff its stake in Alibaba Group Holding (NYSE:BABA)

Yahoo contacted potential buyers

According to the report, the troubled technology company’s advisers sent letters to potential buyers asking them to submit their proposals and provide details regarding financing, conditions or approvals that would have to be met on their end.

Yahoo also asked potential buyers about their key assumptions to move forward with a deal. One of the assumptions may include the possible tax bill on the separation of the company’s stake in Alibaba and Yahoo Japan (TYO:4689) from its core internet business.

Approximately 40 companies signed nondisclosure agreements with Yahoo in recent weeks. The company aims to reduce the number to a small group of serious potential buyers.  Its bankers have been contacting Verizon Communications (NYSE:VZ), IAC/Interactive Corp. (NASDAQ:IAC), Time Inc (NYSE:TIME), and private equity firms, TPG Capital and KKR & Co. L.P. (NYSE:KKR).

It was recently reported that Microsoft Corporation (NASDAQ:MSFT) engaged in early discussions with private equity firms regarding the possibility of contributing to financing a Yahoo acquisition.

Starboard Value launched a proxy fight

Starboard Value launched a proxy fight to replace the entire Yahoo Board. The activist investor owns 1.7% of the outstanding shares of the company.

According to Starboard Value, a proxy fight was necessary because “a significant change is desperately needed to hold management accountable and properly oversee any operational turnaround plan, separation, or sale process.”

Cantor Fitzgerald analyst Youssef Squali believed that the best route for the activist investor and the company’s management is to find a potential buyer before the Annual meeting of shareholders.