Microsoft signs non-disclosure deal with Yahoo | business | Hindustan Times
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Microsoft signs non-disclosure deal with Yahoo

Microsoft is officially kicking the tires at Yahoo again, three years after it failed to buy control of the company.

business Updated: Nov 24, 2011 22:42 IST
Michael J De La Merced

Microsoft is officially kicking the tires at Yahoo again, three years after it failed to buy control of the company.

The software giant has signed a confidentiality agreement with Yahoo, according to a person briefed on the move, joining other potential bidders like the private equity firms Silver Lake and TPG Capital. Behind the broad interest in Yahoo is what investors believe is a trove of riches that could be unlocked by providing stronger management. The Yahoo of today is in a weaker position than in 2008, having fallen behind Google and newer Internet players like Facebook. But Yahoo remains a formidable destination, with its news site along attracting 81.2 million unique visitors in August.

By signing the non-disclosure pact, Microsoft will get a closer look at Yahoo’s books. This time around, however, it is unlikely to pursue its own takeover attempt. Instead, it may aid others.

A growing number of parties have signed confidentiality pacts with Yahoo, an indication that there is dwindling resistance to certain requirements of the agreement, including one that prevents potential bidders from talking to each other.

Microsoft held talks with potential partners last month about a possible bid, people with knowledge of the matter have said. Under one such combination, Microsoft would contribute billions of dollars in financing as part of a consortium led by Silver Lake and the Canadian Pension Plan Investment Board. That group would borrow billions of dollars from banks as well.

In that situation, Microsoft would shoulder little operational responsibility for Yahoo, these people have said. These people, and the person with knowledge of the confidentiality agreement, requested anonymity because they were not authorised to discuss private negotiations.

Other potential bidders have yet to sign non-disclosure agreements. The Alibaba Group, a Chinese e-commerce company that Yahoo has a 40% stake in, has been in talks with private equity firms about making its own bid, people have said before. NyT