Blackstone, Bain plan Yahoo bid: source

Thu Dec 1, 2011 9:56am EST
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By Nadia Damouni

NEW YORK (Reuters) - Blackstone Group and Bain Capital are preparing a bid for all of Yahoo Inc with Asian partners in a deal that could value the Internet company at about $25 billion, a source familiar with the matter said on Wednesday.

The potential bid by the consortium, which would include China's Alibaba Group and Japan's Softbank Corp, has not yet been finalized, the source and two other people familiar with the matter said.

Chinese e-commerce giant Alibaba, whose primary interest is in buying back a 40 percent stake owned by Yahoo, is keeping its options open and said it has not decided whether to participate in a bid for all of Yahoo.

"Alibaba Group has not made a decision to be part of a whole company bid for Yahoo," Alibaba Group spokesman, John Spelich, said in an emailed statement on Wednesday.

Yahoo's shares, which closed at $15.71 on the New York Stock Exchange on Wednesday, gained 6.4 percent to $16.72 in after-hours trading, valuing the company at more than $20 billion.

"Alibaba definitely wants to get its stake back from Yahoo, so whatever that can make that happen, they will try for it," said Hong Kong-based JPMorgan analyst, Dick Wei, adding Alibaba may finance the deal by taking on more debt or finding a strategic buyer.

Alibaba, run by its founder and billionaire CEO Jack Ma, has ties with some of the world's most prominent private equity funds and a group of investors including Silver Lake purchased a 5 percent stake worth $1.6 billion in early November.

A bid for Yahoo at more than $20 per share would mean a deal value of about $25 billion based on 1.24 billion shares outstanding, potentially making it the largest leveraged buyout in recent years.   Continued...