Yahoo Looks for a White Knight, Microsoft Opens its War Chest

[WhiteTara]

http://fortune.com/2016/03/25/yahoo-microsoft/

Yahoo’s turmoil has been largely under the surface for the past few months while it moved to consider bids for its core assets. But now the battle for the company’s future has come to a head, with activist investor Starboard moving to replace the entire board of directors.

As Yahoo CEO Marissa Mayer fights to retain control over the company and dictate the terms of its eventual breakup or sale, a familiar name has appeared: Microsoft. According to a report from tech news site Re/code, the software giant has offered behind the scenes to a number of private equity firms that it would be willing to finance some or all of any bid they make for Yahoo’s business.

The fact that Yahoo will be broken into pieces or sold off wholesale isn’t really in doubt at this point. The board finally agreed to start taking official offers in February, after pressure from Starboard and others based on the decline in the company’s stock price YHOO 0.17% , and now the activist investor has its sights set on a proxy fight.

Starboard says that it has lost confidence in Mayer and the board, and that new management is needed to bring “credibility to a process that has been publicly criticized repeatedly for being too slow, fraught with conflicts of interest and very difficult for highly qualified and motivated strategic and financial buyers to access much-needed diligence information.”