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Consortium plans $25bn Yahoo bid

Private equity firms Blackstone Group and Bain Capital are reportedly preparing a $25bn bid with Asian partners for Yahoo, dwarfing Microsoft’s $20bn offer earlier in the week.

Reuters claimed that the consortium bid includes China’s Alibaba Group, which wants to buy back a 40% stake owned by Yahoo, and Japan’s Softbank. Blackstone and Bain have teamed up previously with acquisitions of the Weather Channel alongside NBCUniversal and a $6bn buyout of US retailer Michaels Stores in 2006.

Yahoo’s value rose as shares closed at $16.72, a $1.01 increase, on the New York Stock Exchange yesterday. If the deal goes ahead at more than $20 per share it could potentially be the largest buyout in recent years.

The current bid puts pressure on both Yahoo and Microsoft. Yahoo intended to sell a minority 20% stake in the business, while Microsoft needs to own a sizeable share to facilitate its money-losing search deal with Yahoo.

Yahoo is experiencing tough times currently as it struggles to compete with internet giants Google and Facebook. The company is also without a chief executive following Carol Bartz dismissal in September.

Dean Kelly, London