WSJ: Yahoo Bids To Come In Billions Of Dollars Below Expectations

(RTTNews) - Verizon Communications Inc.(VZ) and others are expected to bid around $2 billion to $3 billion in the auction for Yahoo Inc.'s (YHOO) core business, less than what the troubled Internet pioneer was expected to fetch, the Wall Street Journal reported citing people familiar with the matter.

The report noted that the telecom giant is considered the front-runner in a field that includes private-equity buyers, some of whom are expected to bid in the low end of that range. As recently as April, people close to the process said Yahoo's core business would likely go for between $4 billion and $8 billion.

The report noted that some offers could still be above the $2 billion-to-$3 billion range, and it is generally in the interest of bidders to play down their enthusiasm in an auction. It is also possible that not everyone will bid for all of the core business and that proposals will be structured differently.

Yahoo has set a deadline in the first week of June for the next round of bids. It isn't clear whether that will be the final round or if another one will follow, the Journal said.

Bidders have lowered their expected prices following weeks of sale presentations by Yahoo Chief Executive Marissa Mayer at the company's Sunnyvale, Calif., headquarters and its disclosure of data that detailed the company's flagging prospects.

Other bidders in contention include buyout firm TPG and an investor group that includes Bain Capital, Vista Equity Partners and former Yahoo CEO Ross Levinsohn, people familiar with the matter have said. Dan Gilbert, the Detroit investor and founder of Quicken Loans, is also in the mix and may be backed by billionaire investor Warren Buffett.

In meetings with potential suitors, Mayer has acknowledged that the company is still in the middle of a turnaround, the report noted.

Should bids come in much lower than expected, Yahoo could abandon the sale and proceed with her turnaround effort, the Journal reported.