LONDON (Reuters) - Britain’s Daily Mail is in talks with potential partners to mount a joint bid for Yahoo’s YHOO.O internet assets, as it seeks to drive up advertising income from its globally popular websites to counter shrinking print revenue.
The newspaper’s parent company, the Daily Mail & General Trust (DMGOa.L), said on Monday it was in early-stage discussions, confirming a Wall Street Journal report that it had approached private equity buyers to team up.
“We have been in discussions with a number of parties who are potential bidders,” a spokeswoman said in an emailed statement, declining to name the private equity firms or give any financial details.
But the group could face tough competition to get its hands on the assets of the troubled U.S. internet pioneer.
Several private equity firms are weighing offers, while Time Inc (TIME.N) is considering teaming up with a partner for a bid, sources have told Reuters. Telecoms giant Verizon (VZ.N), which owns AOL, is also reportedly interested.
The Mail’s celebrity-focused websites, DailyMail.com and MailOnline, are among the world’s most popular in the English language. Laden with snaps of Britain’s royal family and selfies of reality television stars, they attract a total of 14 million visitors a day.
But the company needs to extract more revenue from online as advertising sales from the right-leaning Daily Mail newspaper shrink fast. Print pushed total advertising revenues down 12 percent in the four weeks from Dec. 27, year-on-year.
Revenue from the websites, 73 million pounds ($104 million) in the last financial year, represent a tenth of the group’s consumer media revenue.
Buying Yahoo’s assets - which include a search engine and email, news and sports services - would boost its online reach and digital ad revenues.
Liberum analyst Ian Whittaker said a deal would particularly help the newspaper group increase earnings in the United States.
“The U.S. has been the main driver of digital growth for Daily Mail & General Trust, whilst traffic has grown well they haven’t quite monetized this traffic as successfully as they would have liked,” Whittaker said.
The plans come ahead of management change at Daily Mail & General Trust, which also operates business publishing and events units.
Chief Executive Martin Morgan, who oversaw the rise of the Mail websites to help turn the publisher into a global brand, is due to step down by the end of the year, after eight years in the top job.
Bids for Yahoo are due on April 18.
Blackstone Group LP (BX.N), KKR & Co LP (KKR.N), TPG Capital LP, Apax Partners LLP, Warburg Pincus LLC, Bain Capital LLC and Hellman & Friedman LLC, are among the private equity firms weighing bids, sources have told Reuters.
Additional reporting by Jessica Toonkel and Eric Auchard; Editing by Peter Cooney, Giles Elgood and Pravin Char