MICROSOFT, the American software giant, is in preliminary talks with Yahoo to buy the US internet company's online search business for $20 billion (£13bn), industry sources say.
But it is understood there is no intention of Microsoft putting in another full takeover bid for the web giant. It pulled its $47.5bn (£31bn) offer for the whole company in May after the target's chief executive, Jerry Yang, and his board rejected t
he bid as too low.
The latest suggestion of a more limited bid follows recent comments by Microsoft boss Steve Ballmer that he is still interested in the search business. The latest proposal reported to be under discussion involves a complex transaction that would see Microsoft support a new management team to take control of Yahoo's search business.
It is believed that Jonathan Miller, a former chairman and chief executive of AOL, and Ross Levinsohn, a former president of Fox Interactive Media, are in the final process of agreeing to head up that new management team.
Yahoo has been criticised by shareholders for rejecting the initial offer from Microsoft. That valued each Yahoo share at $33, but the stock has nosedived since then to $9.
It has recovered in recent weeks to $11.5, partly due to billionaire investor Carl Icahn building up a 5.5 per cent stake in the company.
Under the terms of the latest mooted deal, Microsoft is said to be prepared to provide a $5bn facility to Miller and Levinsohn – while that team would plan to raise $5bn from external investors.
The full article contains 263 words and appears in The Scotsman newspaper.
