Yahoo Bid Said to Be Weighed by Thomas H. Lee With No Final Decision Made

By Brian Womack and Douglas MacMillan - Nov 29, 2011 9:34 PM GMT+0700

Private-equity firm Thomas H. Lee Partners is considering a bid for Yahoo! Inc., the Internet company that’s exploring strategic options, two people with knowledge of the matter said.

The Boston-based firm hasn’t made a final decision on whether it will make an offer for Yahoo, said the people, who asked not to be identified because the matter isn’t public.

Thomas H. Lee Partners joins a growing list of companies that are sizing up offers for Yahoo. Private-equity firm Silver Lake is working with Microsoft Corp. (MSFT) to bid for a minority stake in Yahoo, two other people familiar with the matter said. Andreessen Horowitz, a venture-capital firm, may join the Silver Lake-led group, another person said.

Yahoo, based in Sunnyvale, California, is exploring strategic options after firing Chief Executive Officer Carol Bartz, who faltered in a drive to repel competition from Google Inc. (GOOG) and Facebook Inc. Yahoo’s advisers asked that bids be submitted this week, people close to the situation have said.

Robin Weinberg, a spokeswoman for Thomas H. Lee Partners, declined to comment.

Thomas H. Lee Partners’ other investments include Dunkin’ Brands Group Inc. and Clear Channel Communications. (CCMO)

Yahoo gained 1.4 percent to $15.57 at 9:31 a.m. New York time. The shares were down 7.7 percent this year before today. Microsoft, based in Redmond, Washington, slipped 0.3 percent to $24.80. Before today, the shares had fallen 11 percent this year.

Other Bidders

Private-equity firm TPG Capital has signed a non-disclosure agreement to size up a possible bid, people close to the company have said. KKR & Co. and Blackstone Group LP (BX) are among other private-equity firms considering bids, people with knowledge of the matter said last month.

Microsoft, rebuffed in a 2008 attempt to buy all of Yahoo, would join other investors to safeguard its Web-search partnership with Yahoo and bridge any financing gap a buyout would require, people have said. Microsoft forged a 10-year agreement to provide search technology to Yahoo sites under Bartz. The deal was aimed at helping both companies vie with Google, the leader in U.S. search-related advertising.

Alibaba Group Holding Ltd., China’s biggest e-commerce company, has said it’s interested in acquiring Yahoo, in part to buy back a stake the company owns. With a holding of about 40 percent, Yahoo is Alibaba’s biggest investor.

Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.

The New York Times reported yesterday that Silver Lake is working with Microsoft to submit an offer for a stake in Yahoo. Reuters previously reported that Thomas H. Lee Partners is weighing a bid.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net