Yahoo A Takover Target Again?

Bloomberg reports that Yahoo! Inc. (YHOO) is working with Goldman Sachs Group (GS) to help  the embattled Internet co. defend against a possible takeover bid from AOL (AOL) and private-equity firms Blackstone Group (BX) and Silver Lake Partners who are exploring the possibility of buying the Sunnyvale, Calif.-based company.

News Corp. (NWSA) is another possible buyer, too, according to the report. The idea is that Yahoo, who snubbed a $47.5 billion buyout offer from software giant Microsoft Corp. (MSFT) in 2008, should concentrate on being a media company and align itself with another media-focused company.

One scenario under discussion, according to other sources, among the PE firms is a “complex deal in which China’s Alibaba Group would buy back Yahoo’s roughly 40% stake in Alibaba, ” Yahoo’s stake may be worth as much as $10 billion. Then, some of Yahoo’s other assets “would also be sold off to interested media or technology companies, and the remaining company would be of a much smaller valuation that private-equity firms could get financing for.”

With rumors about takeover plans swirling around, Yahoo’s stock has begun to soar. The co.’s stock surged as much as 10 percent in early morning trading, printing the biggest intraday gain in five months. That’s on top of a 5.7% gain on Wednesday.

While Yahoo hasn’t been approached about a deal yet, notes Bberg, the co. has been working with advisers for about two weeks to field any approach.

Yahoo, who has been testing the patience of its shareholders for the past four years — the stock has fallen almost 50 percent since 2008 –, reports earnings on Tuesday.

At last check, YHOO shares, whose market value stand at less than $22 billion, were up $0.73 to $15.96, a gain of 4.66%. Today’s volume: nearly 80 million shares have traded hands as of 11:30 a.m. ET. The tickers’ average volume over the last 3 months is 21.01 million shares.

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