Today’s Wall Street Journal story talking about yet another takeover attempt of Yahoo is incorrect, say our own sources. And unlike The Times’ story over the weekend, which was equally fictitious (and, here’s an interesting fact – both publications are owned by News Corp.), this story had direct consequences in the market.
Today’s story has former AOL CEO Jonathan Miller out pitching private equity funds to raise “$28 billion to $30 billion” to acquire all of Yahoo.
Our sources say that while Miller and Levinsohn have been talking to Yahoo and Microsoft executives and shareholders for months about Yahoo’s future (and at different times both Miller and Levinsohn have been proposed as Yahoo board members), they have not had any serious discussions with private equity funds about raising capital to take over the company.
The two, along with their other partners at Velocity, have been busy trying to raise a new $300 million fund over the last year anyway. And so far, we understand, they’ve only received commitments for $150 million. So trying to simultaneously raise $30 billion to take over Yahoo seems more than far fetched.
Another reason the story makes no sense – Miller is bound by a non compete agreement with AOL that prohibits him from serving as an employee or board member to certain companies, including Yahoo. In fact, that non compete agreement is the reason Miller couldn’t join Yahoo’s board this last summer. The agreement doesn’t terminate until March, so any near term deal is impossible without AOL’s explicit consent. They wouldn’t give it last summer, and there’s no reason to believe they’d give it now.
Velocity won’t say much about the story, other than to comment that the WSJ made no real effort to contact them for comment before the story was published.
Our sources, combined with basic common sense, tell us the WSJ story is dead wrong. And there were consequences to the story – Yahoo’s stock jumped 11.7% today on the the incorrect news, before settling back down for the day. People lost money, and the SEC should be very interested in whoever was the source for this story.