Yahoo! Inc. (NASDAQ:YHOO) shares fell on Tuesday after reports suggested Verizon Communications Inc. (NYSE:VZ) lodged a lower-than-expected bid for the portal’s internet business.
Even rumours that TPG may be about to bid for Yahoo! did not dissuade investors from dumping stock.
The Wall Street Journal reported Verizon has offered $3bn for Yahoo’s internet operation.
In April, Yahoo!'s core Internet business was said to be worth between $4bn and $8bn.
The telecommunications company is reportedly the top bidder and may have submitted the bid by the second round deadline which was on Monday, sources told the Journal.
Additionally, TPG, a private-equity firm and not to be confused with TPG Telecom Ltd (ASX:TPM), was also expected to submit an offer by Monday, but it is uncertain that the bidders are offering to acquire all the units up for sale, the Journal added.
However, the paper reported that Yahoo!, led by CEO Marissa Mayer, is likely to hold another round of the bidding after that.
The entire Yahoo! business is worth $35bn but this is largely thanks to stakes it owns in China’s Alibaba Group Holding Ltd (NYSE:BABA) and Yahoo Japan Corp. (OTC:YAHOY)
Would rival portals AOL and Yahoo! be merged? Verizon's participation in the auction comes just over a year after it paid $4.4bn for AOL.
The New York telecom has been widely seen as a likely victor in the Yahoo! auction and activist investor Starboard Value has repeatedly said this year it would be a good match with Yahoo!
Yahoo! shares were last seen down 0.7% at $36.83, having recovered from an earlier drop of 1.2% to $36.62.
Verizon shares were up 1.8% at $51.62, while Alibaba shares were down 0.2% at $77.90 and Yahoo Japan Corp ADRs were down 0.2% at $9.71.