Yahoo Shares Surge on AOL Buyout Rumors

It doesn't take much to get Wall Street investors circling Yahoo. The struggling company's stock rose 13 percent in after-hours trading yesterday on vague chatter about possible takeover attempts.

From a story in the Wall Street Journal:

"Silver Lake Partners and Blackstone Group LP are among the firms that have expressed interest in teaming up with AOL to buy Yahoo or trying to take it private on their own, these people said. They added that at least two or three other firms could be interested in participating if a formal buyout proposal is drawn up.

The people familiar with the matter cautioned that these discussions-involving private-equity firms, AOL executives and financial advisers-are preliminary and don't yet involve Yahoo. The conversations may not lead to an approach given the complexities in structuring a proposal, the people said."

So we have talks about possible talks.

Meanwhile, Yahoo seems no more in the mood to be acquired than it was back in 2008 when it foolishly spurned a $50 billion offer from Microsoft. According to a Bloomberg story, Yahoo has turned to Goldman Sachs "to help defend against possible takeover approaches" that may be on the horizon.

Despite disappointing earnings and a spate of recent executive departures, Yahoo CEO Carol Bartz has remained steadfast in her insistence that the company is on a rebound path, not looking for a buyer.

But maybe it's time to switch from a defensive posture toward suitors to a more welcoming one.

(Update: Andrew Ross Sorkin of the New York Times tosses some cold water: "The back-of-the-envelope math requires that Yahoo sell its 39 percent stake in Alibaba, considered one of the company's biggest and most desirable assets, which could be worth $12 billion. That would put Yahoo closer to a more-reasonable $8 billion, again before a premium. But Yahoo believes that Alibaba will fetch more in a public spinoff down the road than in a sale now, so why sell now? And while Alibaba would love to buy out Yahoo's stake in itself, such a move would require the Chinese Internet company to raise yet more capital, raising the potential price of a deal.")

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