Yahoo! (YHOO) Chatter Continues, Sending Shares into Positive Territory
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More chatter Friday about private-equity firm Silver Lake looking to gain a stake in Yahoo! (Nasdaq: YHOO).
Following the sale of Skype to Microsoft (Nasdaq: MSFT), Silver Lake may have enough to gain all or a substantial potion of Yahoo!, sources are saying.
Silver Lake has reportedly been in discussions with Microsoft (Nasdaq: MSFT), Canada Pension Plan, and others about a potential bid for Yahoo! An acquisition of the $20 billion market-cap Yahoo! would be one of the largest private-equity deals since the downturn in 2008.
Risks linger, too. At a time when many consumers are turning to new alternatives to search -- like Facebook -- the traditional model doesn't hold. Typically, a PE firm would borrow a bunch of money for the acquisition, than cut costs to maximize profit. With a tech company, cutting R&D would spell doom. Instead, the investor must focus more on growth rather than immediate return.
Silver Lake also has just $14 billion in assets, meaning it can't make a full buyout of Yahoo! purely on its own, or take on all the risk.
Yahoo! shares are up about 1.8 percent ahead of the bell Friday.
Following the sale of Skype to Microsoft (Nasdaq: MSFT), Silver Lake may have enough to gain all or a substantial potion of Yahoo!, sources are saying.
Silver Lake has reportedly been in discussions with Microsoft (Nasdaq: MSFT), Canada Pension Plan, and others about a potential bid for Yahoo! An acquisition of the $20 billion market-cap Yahoo! would be one of the largest private-equity deals since the downturn in 2008.
Risks linger, too. At a time when many consumers are turning to new alternatives to search -- like Facebook -- the traditional model doesn't hold. Typically, a PE firm would borrow a bunch of money for the acquisition, than cut costs to maximize profit. With a tech company, cutting R&D would spell doom. Instead, the investor must focus more on growth rather than immediate return.
Silver Lake also has just $14 billion in assets, meaning it can't make a full buyout of Yahoo! purely on its own, or take on all the risk.
Yahoo! shares are up about 1.8 percent ahead of the bell Friday.
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