AOL hires advisers for options, eyes Yahoo


NEW YORK: AOL Inc is exploring strategic options, which include a possible tie-up with Yahoo Inc and has retained financial advisers to do so, the Wall Street Journal reported on Sunday, citing unnamed sources.

A source close to Yahoo told Reuters the company, however, was not actively eliciting or reviewing proposals, and nor was it in active discussions with AOL.

AOL and Yahoo weren’t immediately available for comment on Sunday. AOL has not reached out to Yahoo with a proposal, the Journal said, adding that AOL’s advisers had been showing company officials different ideas about a potential deal.

These options included merging Yahoo’s and AOL’s online businesses and spinning off Yahoo’s Asian assets to give shareholders back some capital, the paper reported.

Another idea would have private equity buy a stake in the combined operations and give a dividend to Yahoo shareholders, the paper said.

AOL was also looking at alternatives other than a deal with Yahoo, the paper reported on its website.

Last month, a source told Reuters that several private equity firms had approached Internet and media companies including News Corp and AOL to gauge their interest in buying out Yahoo.

A potential deal would be contingent on Yahoo selling its prized Asian assets, including a 40% stake in China’s Alibaba Group and 34.5% of Yahoo Japan, the source told Reuters at the time.

Last week, AOL reported a 26% fall in quarterly revenue because of steep declines in search and display advertising.

AOL chief executive Tim Armstrong has been trying to turn around the company, known for its dial-up Internet access business, into an media and entertainment powerhouse.

AOL has been immersed in a blur of sales, launches and acquisitions, including purchasing the influential technology blog TechCruch for about US$30mil.

Still, a deal with Yahoo is not easy. Last month, several senior tech and media bankers scoffed at the notion of a tie-up between AOL and Yahoo, and suggested that AOL was frantic in finding alternatives for its lacklustre business. – Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

Next In Business News

Japan's biggest business lobby shrugs off calls for wage hikes
China to support economic recovery, avoid 'policy cliff'
Carlsberg pledges RM2mil in food, education aid
Logos inks first Malaysia JV to develop integrated logistics hub
Indonesia, Malaysia eye joint campaign in Europe to counter palm oil critics
Global semicon revenue to grow to US$450b this year
Palm oil set for lowest close in seven weeks on demand worries
Felda buys 41m FGV shares for RM53.3m
Sentral REIT posts 4Q net profit of RM12.22m
F&N looks towards halal food as new pillar of growth

Stories You'll Enjoy