Yahoo!, Inc.'s Games Won't Work Well For It

The search engine company has presented a questionable sales process in front of the bidders.

The clock is ticking for Yahoo! Inc.

Recently in February, the search engine organization announced a rather questionable sales process which baffled a number of private equity firms that were interested in acquiring the core assets of the company. Bidders, which include Verizon Communication Inc. AT&T, Time etc. have looked to be quite reluctant to sign the Non-Disclosure Agreement drafted by Yahoo.

The above mentioned bidders were hesitant to consider the NDA and uncomfortable with the terms and conditions that had been mentioned in it. They stated that the NDA was rather lengthy, in their words ‘uncharacteristically long document’. The elongated document (NDA) is an agreement that is signed between two companies especially in the case of an acquisition in which the financial terms of the agreement are mentioned.

However in the case of Yahoo’s Non-Disclosure Agreement, it was an extensive and ambiguous document, as per the report, since it lacked important private financial information that is supposed to be the gist of the document.  

The board of the internet company had set up an ‘independent committee’ to come up strategic alternatives for Yahoo as it failed to engage users and run the core business of the company. In the committee, there was JP Morgan, PJT Partners and Goldman Sachs who were presented as the company’s financial advisors to go forth with the bidding process. Additionally, Cravath Swaine was also hired as a legal advisor in the sales auction and the CEO, Marissa Major in an effort to secure the future of the search engine giant also hired Frank Quattrone, a veteran tech banker.

Numerous investors and analysts questioned the sincerity of Yahoo’s sales process and also accused it as a ‘delaying tool’ just to keep Marissa Mayor around and see how her ‘turnaround’ strategic project works out. Her strategy mainly included cutting employees and spending a hefty amount of money on introducing the platform on mobiles. Despite the fact that Ms. Mayor has been given numerous chances to turn the company around; she announced that her plan would require the company to turn around in about six to seven years.

The sales bidding process does not brood well for Yahoo, as its causing dismay amongst investors and analysts especially taking into consideration that the online search company is already amid a proxy fight with Starboard Value LP, an activist investor group. 

However, despite the fact that the search engine organization is stuff in between a lot of negativity, Yahoo stock had still managed to trade on the red side as well. In the market, the stock was trading up by 2.61% at $35.17 which is quite surprising for the company at this point. It would seem like this disappointing sales process would damage investor sentiments but to our amazement, they are being quite patient about it.