Report: Investment group teeing up Yahoo deal

Update January 8 at 12:44 p.m. PST: Added Yahoo's response.

A group of investors are reportedly putting together a buyout deal for Yahoo, which would call for Microsoft's financial backing, according to a report in TechCrunch.

Such an arrangement would call for the investment group to pay a premium of approximately 20 percent to Yahoo's current share price, which closed Wednesday at $13 a share, for the entire company.

The investment group would take Yahoo, which would have a $20 billion market cap under those terms, and simultaneously sell its search and marketing business to Microsoft under its previous terms presented in June, according to the report.

The software giant would not only buy these businesses from the investment group, but also provide much of the upfront financing the investors group would need to make the initial purchase. Microsoft would treat the funding as a loan to the investment group, which in turn would provide a fixed payment based on Yahoo's future cash flow, according to TechCrunch.

The report notes, however, that Microsoft has yet to agree to such a proposal.

Yahoo declined to comment on speculation about the deal.

[JCPayne]

So they are basically an investment group with the goal of killing off Microsoft's competition and turning the pieces over to Microsoft??? Anyone see Microsoft's stock lately?

Not much better than Yahoo.
http://finance.google.com/finance?q=MSFT

[JasonCe]

Please stop your non-sense Microsoft hatred. Get your facts right.

Microsoft stock outperformed both Yahoo and Google, and also Apple stock during the past 12 months. Just use the comparison feature of the web page link you just sent.

I am really tired of you people trying the bash Microsoft by spreading FUD.

[JCPayne]

Yahoo + Microsoft still wont be able to *touch* Google's lead.

- Google up, Microsoft down in November Web searches
http://news.cnet.com/8301-1023_3-10131817-93.html

and the merger will be like another AOL-Time Warner over again.
http://blog.compete.com/2008/02/01/microsoft-yahoo-merger-valuation-impact/

[JCPayne]

No doubt Microsoft wants Yahoo's Overture.com business for themselves.

[Super2online]

Yeah and lets hope they get it!