Takeover bids in the offing for AOL and Yahoo? Speculation rises in America
With Huffington Post now established in the UK, could there be buyer in the wings ready to take over the whole AOL shooting works ?
Since Tim Armstrong took over as CEO at AOL at the end of 2009, the shares have dropped about 47 percent, closing at just under $12 on Thursday. Since Microsoft tried to buy Yahoo in 2008,the stock has crashed about 55 percent.
Last week, Bloomberg said the shares were so discounted that a potential buyer could get Yahoo for less than the value of its stakes in its Alibaba in China and Yahoo Japan. The American web portal would effectively be free! In the past, Adweek makes clear, both Armstrong and Yahoo chief Carol Bartz have said their companies are not for sale. "But some analysts speculate that whether or not the companies want to sell all or parts of their businesses, private equity or companies that see a strategic fit will soon start circling," said the mag. Sameet Sinha, an analyst with B. Riley and Co, says, “Within the next year, something is going to happen with these companies. It needs to. Yahoo has been disappointing since spring 2008. AOL has been disappointing since 2010. It’s very clear someone is going to step in and buy these guys or some sort of financial engineering will happen,” he tells Adweek. A Bloomberg story on Thursday raised the possibility that AOL might be a takeover target for private equity interested in a cheap entrée to the Internet. Sinha said, “When Tim Armstrong came on board and signed up as CEO, he knew it would be a tough slog. He’ll try and grow the core business. He’s not going to give up easily. He’s going to do everything it takes.” Yahoo is also an attractive target for buyers, he said, but a complicated proposition for private equity. A Yahoo spokeswoman told Adweek the company doesn’t comment on speculation or rumor. AOL pointed to the statement with its buyback announcement last week: Armstrong said then he and team “are continuing the disciplined execution of our strategy and have confidence in our future growth prospects.”