Yahoo Inc YHOO.O is focusing on USA telecommunications company Verizon Communications Inc VZ.N as the buyer of its core business after reviewing final bids that it received this week, people familiar with the matter said on Friday. Inc, according to Bloomberg sources.
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Verizon is discussing a price close to $5 billion for Yahoo’s core internet business, one of the people said and the deal doesn’t include the company’s patents at this stage.
If hands are shaken over the deal, it would end a long bidding process for Yahoo, which was put up for sale in February when chief executive officer Marissa Mayer created an independent committee to “explore strategic alternatives”.
Much of Yahoo’s value as a stock is tied up in the company’s stake in Chinese e-commerce giant Alibaba.
The deal could be completed within the next few days, according to Bloomberg.
Shares in Yahoo and Verizon both nudged up slightly following the report. After U.S. regulators failed to give prior approval for the transaction’s tax status, Yahoo was forced to jettison the plan.
The field winnowed down to a handful of bidders, which included AT&T, private equity firms like TPG Capital, and the Quicken Loans co-founder Dan Gilbert, with the backing of Warren E. Buffett’s Berkshire Hathaway.
Verizon sees a complimentary set of businesses that could find a home alongside its AOL properties.
“Verizon has always been the favorite because it has the largest potential synergies and therefore can pay the most”, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.
However, you can bet that Verizon will be wanting to work toward a purchase if it can, because as Entner points out, buying Yahoo would “expand Verizon’s advertising base by 200 million more visitors”, and enable Verizon to collect more data on users to offer better targeted ads.
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Tim Armstrong, the CEO of Verizon-owned AOL, is widely expected to take over Yahoo if it becomes part of Verizon. They have gained 17.5 percent so far this year.
