AOL, along with several private equity firms, is exploring making a bid for Yahoo, reports the Wall Street Journal. [Please note, the WSJ is behind a firewall and may charge you a fee to read this story.]
According to the article, "Silver Lake Partners and Blackstone Group LP are among the firms that have expressed interest in teaming up with AOL to buy Yahoo or trying to take it private on their own, these people said. They added that at least two or three other firms could be interested in participating if a formal buyout proposal is drawn up."
Yahoo is not yet involved in the talks, the article said.
According to the story, "Shares of Yahoo jumped 5.7% to $15.25 on Wednesday in one of the highest volume days of the year. The stock traded 49.6 million shares, compared with an average of 17 million shares a day so far this month. It was one of the best performing tech stocks of the day, far outperforming the Nasdaq’s 1% rise."
AOL has a market cap of $2.68 billion, the article says, compared to Yahoo’s market cap of $20.56 billion.
Under one scenario, some of Yahoo’s "assets would…be sold off to interested media or technology companies, and the remaining company would be of a much smaller valuation that private-equity firms could get financing for, one of the people said, " according to the WSJ.
The article also notes that "AOL Chief Executive Tim Armstrong has also talked privately about the idea that Yahoo could buy AOL, according to a person familiar with the matter. Another person familiar with the matter said private-equity firms may also look to partner with media companies to buy Yahoo."