AT&T (T) is poised to make its own run for Yahoo’s (YHOO) Internet business, potentially thwarting telecom rival Verizon Communications (VZ), which has been viewed as the front-runner.
Bloomberg reported Wednesday that AT&T “remains a contender” to acquire Yahoo’s Internet business. AT&T is mulling its own play for the Web portal after YP Holdings decided to back off, Bloomberg reported.
While Verizon has a huge debt load as the result of acquiring Vodafone’s 45% stake in Verizon Wireless for $130 billion, AT&T’s balance sheet is in better shape from its acquisition of DirecTV Group.
YP Holdings, now a digital advertising business, is AT&T’s former print yellow pages unit. Cerberus Capital Management controls YP Holdings, though AT&T still holds a stake in it.
Lowell McAdam, Verizon’s CEO, restated an interest in buying part or all of Sunnyvale, Calif.-based Yahoo at a JPMorgan conference on Tuesday.
“It’s a possibility to gain greater scale,” McAdam said. Verizon acquired AOL for $4.4 billion in 2015.
A second round of bidding for Yahoo is expected to conclude in early June. Aside from Verizon, bidders are said to include private equity firm TPG and a consortium led by Bain Capital LP and Vista Equity Partners.
Berkshire Hathaway (BRKB) Chairman Warren Buffett, a noted investor who generally stays away from tech companies, might back a group led by Quicken Loans founder Dan Gilbert, if it makes a bid.
Yahoo owns stakes in China e-commerce giant Alibaba Holdings (BABA) and in Tokyo-listed Yahoo Japan. Those assets may be excluded from a sale of the Internet and advertising business.
Yahoo shares fell 5.2% to 35.59 on the stock market today. Yahoo’s dive likely reflects Alibaba’s 6.8% tumble on an SEC probe. AT&T advanced 0.3% and Verizon 0.6%.