Yahoo Shares Jump on Talk of Alibaba-Softbank Offer

Stalking Yahoo: China's leading B2B e-commerce site is leading a new offer for Yahoo.

Shares of Yahoo! jumped 4.8% Thursday after word leaked that China e-commerce leader Alibaba and Japan’s number two mobile carrier Softbank were readying a bid for the entire company.

The two Asian firms are in advanced stages of talks with Blackstone Group and Bain Capital to structure a deal that will satisfy all parties, according to three anonymous sources cited by the article.

Yahoo is currently considering offers from TPG Capital and Silver Lake for minority stakes, according to sources. Silver Lake is offering $16.60 a share while TPG Capital is offering a higher bid. But key Yahoo investors are resisting these offers because they feel the company can fetch a higher price if sold in its entirety.

A joint Alibaba-Softbank offer would likely seek to buy Yahoo as a whole, then carve up pieces of the company among themselves. They have more incentive to offer a higher price because Alibaba wants to buy back the 40% of its shares owned by Yahoo. Softbank, which once owned a large stake in Yahoo, would likely use Yahoo Japan as an asset that would complement its business as Japan’s number two mobile carrier. Yahoo Japan is 35% owned by Yahoo.

So far neither Alibaba nor Softbank have officially confirmed their involvement in a bid for Yahoo, but Jack Ma and Masayoshi Son both have longstanding personal relationships with Yahoo co-founder Jerry Yang and have been in communication with him since Yahoo appeared interested in a sale. Yang has rebuffed at least two efforts by Ma to buy back Yahoo’s 40% stake in Alibaba during the past two years.

The Alibaba-Softbank bid for Yahoo envisions Yahoo’s flagging domestic US operations ultimately falling under the control of Blackstone and Bain.