The race to takeover Yahoo’s core assets has so far been exciting, but most analysts have already said that the odds are in favour of Verizon, the New Jersey-based telecommunications company. The company now seems to be preparing for the June 6 second-round bid deadline by hiring Bank of America, former Yahoo adviser, as its investment banker.
The development comes in a time when it is crucial for each bidder to find the prime amount of leverage and place their stakes. The bank has been one of the primary advisers of Yahoo until last year and is said to pertain intimate data about the Internet company. It was even listed as Yahoo’s lead adviser last year on a plan to spin off its 15 percent stake in China’s e-commerce company Alibaba, whose value is equivalent to 84 percent of Yahoo’s $35 billion market capitalization. The plan wasn’t carried through, though because the spin-off could result in a tax bill that would have potentially exceeded $10 billion.
The aforementioned bank will not only provide Verizon with crucial data for the auction, it can also help provide financing for Verizon’s offer. The other investment banks working on this bid, Guggenheim Partners, LionTree and Allen & Company, have limited or no balance sheet for deal financing.
Verizon is primarily interested in Yahoo’s advertising technology tools, according to one of the sources. It has also shown significant interest in search, mail and messenger, aiming to integrate these services with those from AOL that it acquired last year $4.4 billion.
Analysis puts first-round bids for the assets of Yahoo in the range from $4 billion to $8 billion. Verizon has also taken over Microsoft’s advertising technology unit and buying a company called Millennial Media to makes its position stronger in advancing its advertising-backed Internet business.
Seeing its lead in the whole race, reportedly Alphabet, Time Inc, AT&T and the likes backed out from bidding process a month ago.