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Yahoo sale valuation expected to fall up to $5bn below expectations

A much anticipated sell off of Yahoo is expected to net as much as $5bn less than previously anticipated for the internet giant, according to reports in the Wall Street Journal.

Previous bids for the core business came in at between $4bn and $8bn but a fresh round of bidding, due in the first week of June, is expected to generate bids only toward the lower end of that range with figures of between $2bn and $3bn being quoted.

Whilst the final figure won’t be disclosed until then Verizon, considered to be the front runner in the race to acquire the business, may yet up its offer beyond $3bn to head off competition from a number of private equity buyers keen to swoop on a bargain.

Yahoo’s core business has been hit by declining returns with revenues dropping 18 per cent in the first quarter to $859.4m. The vast majority of its $35bn market capitalisation emanating from stakes in China’s Alibaba and Yahoo Japan.

Yahoo previously indicated that it would accept bids no later than the first week in June though it hasn’t said if it would extend this window if the offers on the table were not to its liking.

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John Glenday

John Glenday is responsible for compiling The Drum's daily morning bulletin and ensuring that overnight breaking news is covered while you're still brushing your teeth. Can also make a mean cup of tea.

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