Yahoo May Get $18-$21 a Share in Takeover Bid, Gabelli Says

Yahoo! Inc. may be valued at $18 to $21 a share should the U.S. Web portal receive a takeover bid, said Mario Gabelli, whose Gamco Investors Inc. (GBL) owns the stock.

The range depends on how a deal is structured to minimize taxes, he said during a Bloomberg Television interview today. “Multiple parties” have expressed an interest in buying the Sunnyvale, California-based company, Yahoo co-founder Jerry Yang said in a memo last month. The Wall Street Journal said yesterday that buyout firms are considering bids valuing Yahoo at $16 to $18, citing people familiar with the matter. The stock added 1.5 percent to $16.18 today.

Yahoo fell as low as $11.09 this year after the company disclosed that Alibaba Group transferred its Alipay business to a private entity controlled by Chief Executive Officer Jack Ma. Yahoo, which is Alibaba’s biggest shareholder, ended up with less access to the Chinese online payment unit’s growth.

“Yahoo has significant assets,” Gabelli, whose firm owns more than 5.3 million shares of the company, said today during an interview on Bloomberg Television’s “In the Loop” with Betty Liu and Dominic Chu. “But they had their knees cut off by what Jack Ma did,” said Gabelli, who oversees $28 billion as chairman and chief executive officer of Gamco in Rye, New York.

Ma said Oct. 1 that he’s “very interested” in buying Yahoo, which fired CEO Carol Bartz in September. Yahoo owns 40 percent of Alibaba. Reuters reported earlier this month that Microsoft Corp. (MSFT) may bid for Yahoo. KKR & Co. and Blackstone Group LP (BX) are among the private-equity firms considering possible offers for Yahoo, people with knowledge of the matter told Bloomberg News.

Yahoo isn’t necessarily for sale, Yang said at the All Things Digital Asia conference in Hong Kong today. When he was CEO in 2008, he rejected a $31-a-share offer from Microsoft.

To contact the reporters on this story: Kaitlyn Kiernan in New York at kkiernan2@bloomberg.net; Betty Liu in New York at bliu17@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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