Despite losing in its US$44.6 billion attempt to acquire the company in 2008, Microsoft has reportedly signed a Non-Disclosure Agreement (NDA) that will allow it to take a closer look at Yahoo! Inc.’s financial information to help it consider financing a bid.
Microsoft, along-with private equity firms Silver Lake and TPG Capital are keenly interested in a trove of riches that could be unlocked by providing stronger management to the failing internet giant. Today’s Yahoo is certainly in a much weaker position than it was in 2008, having fallen behind Google and newer Internet players like Facebook. However, Yahoo still remains a formidable entity, with its News site alone getting 81.2 million unique visitors in August & there are attempts to get back on track.
However, this time around, the signing of NDA is not for Microsoft’s own takeover attempt. It seems the agreement is to help others or a team to consider acquisition. A growing number of parties have reportedly signed confidentiality pacts with Yahoo, a clear indication that there is lessening resistance to certain requirements of the agreement, including one that prevents potential bidders from talking to each other.
Thus, the bid, which Yahoo’s advisers have asked to be submitted next week, will allow only a minority stake in Yahoo, as it is simply not possible, currently, to finance a full takeover. Apparently, Microsoft has joined other investors to safeguard its own Web-search partnership with Yahoo and bridge any financing gap (it could be billions) a buyout would require.
One might recollect Microsoft had tried to literally gobble-up Yahoo in 2008 with its US$ 45 Billion offer for Yahoo. It had then hoped to become a formidable competitor to Google. Yahoo simply turned down the offer & Microsoft walked away.