-- This article was written by Laura Board of The Deal
The U.K.'s Daily Mail & General Trust has confirmed its interest in joining the bidding for Yahoo! (YHOO), which effectively put itself up for sale in February when it hired advisors to consider alternatives to a reverse spinoff.
The publisher of the eponymous British tabloid and the hugely successfully DailyMail.com website has held "discussions with a number of parties who are potential bidders," according to a statement from a DailyMail.com spokeswoman.
"Discussions are at a very early stage and there is no certainty that any transaction will take place," she said.
Daily Mail last year bought Elite Daily, an American site that claims to be "the voice of Generation Y," for $43 million and attributed its interest in Yahoo! to the success of that business and of DailyMail.com, which is the most popular English-language news site in the world, with more than 211 million monthly unique users.
The Wall Street Journal first reported the Daily Mail was in talks with potential private equity bidders for the Sunnyvale, Calif., company. The Financial Times later added that a straight cash takeover wasn't on the agenda and Daily Mail & General Trust was looking at either acquiring Yahoo!'s news and media assets after a private equity firm bought the whole business, or taking a majority stake in a new company incorporating Daily Mail & General Trust's existing online businesses and those of Yahoo! The creation of that new company would follow a private equity takeover of Yahoo!, according to the second hypothetical scenario that the Financial Times reported was under consideration.
Yahoo!, under pressure from activists including Jeffrey Smith's Starboard Value, in February hired Goldman Sachs (GS), JPMorgan (JPM) and PJT Partners (PJT) to handle "outreach to and engagement with potentially interested strategic and financial parties."
Verizon Communications (VZ) was immediately seen as top of the list of potential suitors, with management having previously acknowledged its interest. Verizon bought AOL last year for $4.4 billion and Starboard's Smith has advocated a merger of Yahoo with AOL.
Time (TIME) is seen as another potential bidder, while Bloomberg reported last week that Google (GOOGL) is weighing an offer, as are private equity firms including Bain Capital LLC and TPG Capital. (Google is part of TheStreet's Action Alerts PLUS portfolio.)
Yahoo! has reportedly set an initial April 18 deadline for bids.
Yahoo! CEO Marissa Mayer's Plan A was the separation of its Internet businesses and its stake in Yahoo! Japan from its holdings in Alibaba (BABA).
But Mayer and Chairman Maynard Webb face a proxy fight with Smith's Starboard Value, which last month launched a campaign to replace the entire board with nine candidates of its own.
The DailyMail.com spokesman would provide no other information about the bidding.
As well as the trio of investment banks, Yahoo! is taking advice on its sale process from law firm Cravath, Swaine & Moore.
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