A group of investors led by private equity firm Silver Lake and including the C$153.2 billion (US$150.1 billion) Canada Pension Plan Investment Board, Toronto, offered to buy a minority stake in Yahoo! Inc. for about $16.60 a share, according to people with knowledge of the matter.
Silver Lake, also working with Microsoft Corp. and venture capital firm Andreessen Horowitz, offered to buy convertible preferred securities equal to a 10% to 15% stake for as much as US$3 billion, said one of the people, who asked not to be identified because the bids made this week are private. The price was lower than an offer made by private equity firm TPG Capital, two people said.
Silver Lake’s bid values Yahoo at US$20.6 billion, about 6% higher than its market value at Tuesday’s close. Under Silver Lake’s proposal, Yahoo would be able to distribute at least $5 billion to shareholders in the form of a special dividend or a share buyback, the person said. Yahoo aims to wrap up the deal by the end of the year, people said.
Spokeswomen for Yahoo, Silver Lake and Canada Pension Plan declined to comment.
Yahoo directors are likely to discuss offers at a board meeting scheduled for Wednesday, one person said. Alibaba Group Holding, aiming to buy back the stake in itself owned by Yahoo, is monitoring the situation and may still enter the bidding, one person said.
While Microsoft failed in 2008 to acquire all of Yahoo, it aims to use a minority holding to safeguard its 10-year web search agreement with the company.
KKR & Co., Blackstone Group and Thomas H. Lee Partners are among the private equity firms considering possible bids for Yahoo, people with knowledge of the matter have said.
Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.