Efforts made by Yahoo (NASDAQ:YHOO) to sell itself is gaining traction. Warren Buffett, the iconic investor, has given his financial muscle to a consortium trying to bid for the core internet assets of the embattled Internet giants. Buffett joins a group which counts billionaire Dan Gilbert, the Quicken Loans founder as one of its members.
One company, multiple suitors
The Buffett, Gilbert consortium is just one of many suitors which have moved into a further bidding round to acquire Yahoo. The bid is being led by Gilbert. Financing is being offered by Berkshire Hathaway (NYSE:BRK.B), a Buffett company. The latter is an old hand in such financial maneuvers, having done the same process with 3G Capital, when it was doing the takeovers of Kraft and H.J. Heinz. Gilbert, however, will spearhead the negotiations.
Yahoo's assets have attracted a number of suitors. The list of members populating rival consortiums includes private equity firms and Verizon (NYSE:VZ). The Daily Mail owner also have expressed interest to take control of Yahoo assets. The internet company was hit in April by weak investor confidence stemming from declining advertising customers. It later on shortlisted 10 potential buyers. The list of other contenders include TPG Capital. There is also a group composed of Vista Equity Partners and Bain Capital.
For Yahoo, the Buffett name could improve the prospects of selling itself. The tycoon, during an annual meeting of Berkshire in April, admitted that his company was not quick enough to get slices of the new technological industry. He already had an IBM stake.
The companies which had already reached the second bidding round seek to purchase an iconic name in Silicon Valley- even though Yahoo has long surrendered its once apex position in the World Wide Web to its much younger rivals like Facebook and Google. Although the company has tried a number of times to reinvent himself, it has failed. The unsuccessful streak has continued under Marissa Meyer, Yahoo's present supremo.
As Yahoo, along with its bankers, tried to canvass for a few preliminary bids, the Internet company was subjected to harsh criticism not only from outsiders, but also from a few of its prospective bidders. Starboard Value, the activist hedge fund, has also criticized its sales processes. Even then, Yahoo can show progress. It amicably settled a future fight with Starboard in its board, by offering four director seats to the investment firm. One of those seats is under the control of Jeffrey Smith, the Chief Executive of Starboard. He now sits on a special board committee overseeing this potential sale.