AOL is exploring strategic options for the company which include a possible combination of assets from itself and Yahoo, according to a news report.
The Wall Street Journal reported on Sunday that a tie-up of AOL and at least a part of Yahoo’s assets are just one of the directions the company is exploring via an advisory team, the Journal reported.
“Among the scenarios being examined by AOL are a combination of Yahoo and AOL’s online businesses after a spin-off of Yahoo’s Asian assets that would return capital to shareholders, people familiar with the matter said,” according to the paper. “Another scenario would have private-equity firms take a stake in the combined operations, along with a plan to pay a dividend to Yahoo shareholders”, the paper added.
This is not the first time that the Journal has reported that AOL had mulled the possibility of a potential tie—up with Yahoo; in October, the paper reported that AOL and several private equity groups were considering a bid to buy Yahoo.
The firms named by the Journal included Silver Lake Partners and Blackstone Group, but as many as three other groups might also be included.
In Sunday’s report, the paper said that AOL had held merger talks with Yahoo before, but not this time. For whatever reason, the paper did not link back to the earlier story.
Previously, there were several scenarios being floated around. One would have China’s Alibaba Group buy back Yahoo’s 40 percent stake in Alibaba, which provides a huge chunk of Yahoo’s market value.
Yahoo departments would then be sold piecemeal to various companies so the AOL-private equity group could come in and buy what’s left for a much lower price.
During the company’s recent third-quarter conference call, Yahoo chief executive Carol Bartz was asked whether she would entertain an acquisition offer from a private-equity firm. Bartz said that she couldn’t really comment. “We like our strategy, we like our process, and that’s what we’re focused on,” she said
