Belfast Telegraph

Daily Mail owner considers bid for internet company Yahoo

The owner of the Daily Mail and The Mail On Sunday newspaper is considering a bid for the struggling US internet firm Yahoo.

The Daily Mail & General Trust (DMGT) is understood to be in talks with a number of private equity firms about making an offer for the company, which has put itself up for sale amid falling profits and shareholder pressure.

DMGT is understood to be considering two bid possibilities.

In one scenario, a private-equity partner would acquire Yahoo's core web business with the Mail taking over the news and media properties, such as Yahoo Finance and Yahoo News.

In another scenario, a private-equity firm would acquire Yahoo's core web business and merge its media properties in a new company with the Mail's online operations, and Elite Daily. DMGT would then run this newly combined firm.

DMGT is understood to have been in talks with around six private-equity firms to help finance a bid.

A spokesperson for DMGT said it has "been in discussions with a number of parties who are potential bidders".

The spokesperson added: "Discussions are at a very early stage and there is no certainty that any transaction will take place."

Valuing Yahoo is difficult because a large part of its 34 billion US dollar market capitalisation (£24 billion) is made up of Asian holdings, such as its stake in Chinese retail website Alibaba.

However, analysts estimate its core business, excluding its Asian holdings, is worth around 4.3 billion US dollars (£3 billion).

Yahoo, an early web success, has struggled to compete against the might of online rivals Facebook and Google.

Yahoo said it expects earnings to slump by 21% to around 750 million dollars (£529 million) this year. It reported a 4.4 billion US dollar (£3.1 billion) annual loss for 2015.

The New York-based activist hedge fund investor Starboard Value called for the replacement of the entire Yahoo board at the loss-making company in January.