Troubled Yahoo Attracts Suitors

Yahoo Inc. (NASDAQ:YHOO) has attracted the interest of PE firm Thomas H. Lee Partners for its U.S. operations, according to knowledgeable sources. THL is using the LBO route to attempt a purchase of Yahoo’s U.S. operations for approximately $5-6 billion, and then use its media experience to turn them around.

This is a new twist on the various M&A proposals surrounding troubled Yahoo, currently without a COO after the sacking of CEO Carol Bartz in September. Other proposals include purchase of a minority stake via the PIPE (private investment in public equity) route – favored by PE firms such as Silver Lake, KKR (NYSE:KKR) and TPG. Silver Lake is reportedly being backed by Microsoft (NASDAQ:MSFT).

Yet another strategy, being pursued by the likes of Blackstone (NYSE:BX), Bain Capital and Hellman & Friedman, is to link up with China’s Alibaba Group and Japan’s Softbank Corp.

Yahoo’s current valuation is approximately $19 billion. A host of confidentiality agreements are expected to be signed this week as circling suitors look to examine the company’s books.

More from The Cheat Sheet