News Corp. Scrambles To Bid For Yahoo

The rumors keep on rolling around the surprise semi-hostile Microsoft bid for Yahoo this morning. Sillicon Alley Insider says they’ve heard that a couple of hedge funds were already preparing their own bids for Yahoo, and were (or perhaps still are) days away from making their move.

According to our source, other big private equity funds were busy today, too. Taking calls from News Corp., that is.

News Corp. and Yahoo have been mulling over a merger (of Yahoo and MySpace) since the middle of last year. But the deal back then had News Corp. selling off MySpace in exchange for 25% of Yahoo’s stock. Now the roles have been reversed. Today, News Corp. was supposedly making calls to put together a syndicate and make a counter offer to what Microsoft put on the table. No takers so far, we hear.

All of this is likely to come to nothing, though. I agree with Paul Kedrosky and Mathew Ingram – Microsoft has probably already won this deal, simply because they aren’t relying solely on spreadsheets in their valuation. Hedge funds don’t have that luxury.