Alibaba, Temasek in talks over Yahoo deal – report

The Singaporean sovereign wealth fund is already a shareholder in Alibaba Group and may offer to finance the transaction in return for a larger stake in the business, Bloomberg reported, citing people familiar with the matter. One source added that Temasek is not interested in owning Yahoo.

It is also suggested that a tie up between Alibaba and Temasek could be part of a takeover bid for Yahoo launched by Silver Lake Partners and Russia's Digital Sky Technologies (DST). Alibaba, Silver Lake and DST are said to have discussed forming a group to make an offer and, according to Bloomberg's sources, Silver Lake has made Yahoo aware of its efforts.

The US internet firm's future is uncertain following the sacking of CEO Carol Bartz, with the board thought to be considering the sale of all or part of the company.

Last month, Silver Lake, DST and Temasek invested in Alibaba alongside Yunfeng Capital, a private equity firm set up by Alibaba founder Jack Ma. The transaction, structured as a tender offer to employee shareholders and option holders as well as certain other shareholders, is said to be worth up to $1.6 billion. It values Yahoo's holding in the Chinese company at nearly $13 billion.

Sources told AVCJ that there was no connection between the two situations because Alibaba's negotiations with Silver Lake predate Bartz's departure from Yahoo.

Ma subsequently said that he was interested in buying all of Yahoo and has held talks with other potential buyers about options. Softbank Holdings and Yahoo invested in Alibaba in 2005, with the latter taking a 40% stake in exchange for $1 billion and control of its China-based assets.

The idea of a joint bid for Yahoo by Silver Lake, DST, Alibaba and Temasek - with the latter two taking Yahoo's Alibaba stake - makes sense in the light of reports that private equity players would only consider making an offer for the US firm if the Asian assets were sold. This would create a smaller and simpler acquisition, supposedly with fewer tax implications.

Last week, Yahoo was said to be close to unloading its 35% stake in Yahoo Japan, with an acquisition by Softbank or a management team seen as the most likely outcome. The asset, in which Softbank has a 40% interest, has a total market value of about $19 billion and net cash of $2 billion.

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• Topics
• Greater China
• North America
• Investments
• Technology
• China
• USA
• Alibaba Group
• Jack Ma
• Silver Lake
• Temasek Holdings
• TMT
• M&A