The publisher of Britain's Daily Mail newspaper is interested in buying Yahoo! Inc.'s media and news properties, according to a person familiar with the matter, and is in talks to join with potential bidders who would carve up the U.S. Internet company.
Daily Mail has spoken with a half dozen U.S.-based private-equity firms and a bid would only be made in conjunction with a partner, according to a person familiar with the matter. The Mail could take over Yahoo's media and news properties while its partner buys the Web business, said the person, who asked not to be named because the plans are private. Alternatively, a buyer could unite the Mail's online operation with Yahoo's media assets in a separate company. Yahoo's market value is about ten times that of the Mail.
Yahoo's media assets would augment Daily Mail's growing online presence in the U.S. by adding some of country's biggest news, weather and messaging portals. The U.S. site, DailyMail.com, has gained ground since starting in 2012 by focusing on celebrity news and younger readers. It and MailOnline.com in Britain are among the most-read news sites in English. While ComScore Inc. ranked Yahoo sites third among U.S. visitors in January with 205 million, Mail had 75 million unique visitors and placed 33rd.
"People need to remember that we are talking about the Daily Mail buying bits of Yahoo here, not all of Yahoo," said Alex DeGroote, a media analyst at Peel Hunt in London. "These assets make strategic logic for Daily Mail, but the company is heavily in debt and they would have to join with some big players to get a sniff of these assets."
The Daily Mail's parent, Daily Mail and General Trust, reported net debt of 723 million pounds ($1 billion) at the end of January, largely owing to pension plan contributions.
"Discussions are at a very early stage," a representative for Daily Mail said Monday in an e-mailed statement. "There is no certainty that any transaction will take place."
Yahoo said it would explore strategic alternatives, including selling its main Internet operations, earlier this year after scrapping a long-time plan to spin off its valuable Asian assets. The company's stock has declined about 20 percent in the past 12 months as turnaround efforts led by Chief Executive Officer Marissa Mayer stalled and sales have sagged, leaving Yahoo vulnerable to activist investors.
Verizon Communications plans to make a first-round bid for Yahoo's Web business on April 18 and is willing to acquire the company's Yahoo Japan Corp. stake to help sweeten the offer, according to people familiar with the matter. Google, the main division of Alphabet Inc., is also considering bidding for Yahoo's core business, a separate person said.
The Wall Street Journal first reported news of the Daily Mail's talks with possible private-equity partners. Mail formed a marketing agency last year with Snapchat Inc. and WPP, the world's largest advertising company, and bought the Elite Daily website, a news platform geared toward so-called millennials.
Daily Mail rose 0.6 percent to 700 pence at 2:32 p.m. in London, giving the company a market value of 2.5 billion pounds ($3.5 billion). Yahoo shares rose 1.2 percent to $36.53 in New York, for a market value of $34.5 billion.
DailyMail.com said in June it was partnering with daytime TV talk-show host Dr. Phil McGraw for an online video series. The venture, called DailyMail TV, will be based at the Daily Mail's New York office with anchors and studios also in London, Los Angeles and Sydney.