In 2008, Microsoft bid almost $45 billion in an attempt to buy Yahoo. That deal fell through, but with Yahoo putting itself on the chopping block and planning to divest its core Internet business, the software giant is once again expressing an interest. This time, the plan is not to buy the whole company but instead to offer financing to the private equity firms that are currently considering bids, according to Kara Swisher at Recode.
Yahoo's market cap is about $32.5 billion, but a hefty portion of this number is made up of investments in Alibaba and Yahoo Japan. Without these investments, the core Yahoo business is valued at between $6 billion and $8 billion. According to Swisher's sources, the Yahoo board wants $10 billion, an amount it seems unlikely to get.
Activist Yahoo shareholder Starboard Value has criticized the sale process, calling it "too slow" and "fraught with conflicts of interest," and it is trying to have the board replaced. Putative buyers have been critical of the board, with Swisher writing that those she has spoken to have called the process a farce. An unrealistically high valuation is sure to fuel this incredulity.