Talking about the recent crucial development a dependable source of ours revealed that the Microsoft Corp signed a confidentiality agreement with Yahoo Inc, which would allow the software biggie to view closely the aspects of Yahoo’s business.
This has placed Microsoft right in the league of several other equity firms which are also pondering over the activities carried out by Yahoo and are considering the provisions for striking a deal with the Internet company which lately has been going through a rough patch.
In September Yahoo took a big step of firing its Chief Executive and ever since then is going through a stern “strategic review” to completely overhaul its business and escalate its stagnant revenue growth. Other firms which have signed the confidentiality agreements with the Yahoo are KKR and TPG capital, people known to the topic reported to Reuters. All the firms have the objective of acquiring minority stakes in Yahoo of about up to 20 percent, with a long term strategic objective of taking over the entire company, the similar sources revealed.
Another private equity firm named Silver Lake has also signed a nondisclosure agreement with Yahoo, which is believed to further intensify the competition. Also it was reported that a lot of private equity firms previously refused to sign the non disclosure agreement of Yahoo because it posed restrictions on them from forming up alliances and gaining the strategic advantage over the rests.
Just last month it was reported that Microsoft, backed by the cash pile of $57 billion was planning on to bidding for Yahoo.
If the sources are to be believed then the Microsoft’s signing the nondisclosure agreement with Yahoo is a very recent development. The New York times first reported the confidentiality agreement between the two companies.
However, maintaining a diplomatic foothold, both Yahoo and Microsoft refused to comment on the story. Microsoft’ has been eying on acquiring Yahoo since long. In the year 2008 it offered Yahoo a spell bounding sum of $47.5 billion, or $33 per share but Yahoo declined the offer. Once it failed, Microsoft followed up next year in 2009 by striking a 10 year deal with yahoo that allowed Microsoft’s technology to facilitate Yahoo’s search results and provided Microsoft a cut of 12 percent of advertising revenue on Yahoo.
The development’s effects on the two corporate houses manifested in the early afternoon trading on Wednesday as the Microsoft shares declined to 0.9 percent at $24.58 and shares of Yahoo increased by 1 cent at $14.98