The word is out that several private equity firms have approached Internet and Media companies including News Corp (NASDAQ:NWSA) and AOL Inc (NYSE:AOL) in recent weeks to gauge their interest in buying out Yahoo Inc (NASDAQ:YHOO), I learned Wednesday.
The deal would be contingent on Yahoo, the #2 US search engine, selling its prized Asian assets that include its 40% stake in China’s Alibaba according to the Buzz.

Yahoo’s plans for its Asian investments have sprung into the investor spotlight since Yahoo Japan (4689.T), of which it owns 35%, turned to arch-foe Google Inc (NASDAQ:GOOG) for its Internet search technology.

Disposing of those assets, which incidentally, some of Yahoo’s investors favor, would have the effect of reducing Yahoo’s market value of more than US$20B poste haste, making a deal tasty and digestable.

It is said that talks with News Corp and AOL started 2 weeks ago and are getting pretty serious, but Yahoo had not been approached yet.

Yahoo shares, which closed Wednesday up about 6%, gained another 9.5% to US$16.71 after hours.

Shares in Alibaba.com (1688.HK), the listed arm of China’s largest e-commerce firm, and Yahoo Japan also are rising in Asia trading.

Speculation of private equity interest in Yahoo, which is struggling to re-kindle growth and stem an exodus of senior executives to rivals, has been rumored from time to time recently.

News Corp, AOL, and Yahoo declined comment.

In Tokyo, Yahoo Japan, owned 34.5% by Yahoo Inc, gained 5.5% to 30,350 Yen. Yahoo Japan’s top shareholder Softbank Corp (9984.T) rose 2.9% to 2,725 Yen.

Softbank, Japan’s # 3 mobile phone operator owns 33% of Alibaba Group. The heads of the 2 groups, Jack Ma of Alibaba and Masayoshi Son of Softbank, work very closely, and as 1 of their latest collaborations, Yahoo Japan and Alibaba’s e-commerce website Taobao in June launched online platforms to cross sell into each others’ markets.

This news comes as Yahoo, the # 2 search engine in the UAS after Google, struggles to revive its revenue growth under the management of Chief Executive Carol Bartz, and to rebuild its Buzz among consumers as it faces competition from Social Networking sites like Facebook.

The talk is that AOL is keen on gaining scale and snagging content to re-kindle its growth. The Wall Street Journal said that people familiar with the matter are saying that private equity firms are exploring the possibility of teaming up with AOL on a joint bid, which could give AOL the content and online eyeballs it needs to become a News and Entertainment powerhouse.—Paul A. Ebeling, Jnr. www.livetradingnews.com

Posted by Shayne Heffernan on Oct 14th, 2010and filed underAnalysis, USA.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site