Is Yahoo Still The Leading Suitor For Yelp?

Shares of
Yelp IncYELP
continued to surge on Friday. Shares gained momentum on Thursday after
The Wall Street Journal
reported the company is exploring a sale and has hired investment bankers to field potential offers. The publication did not mention any specific companies that could be interested in acquiring Yelp. Axiom Capital's Victor Anthony
argued on Thursday
that the list of potential acquires for Yelp is short. Anthony added he was "hard pressed" to see why
Facebook IncFB
would have any interest in acquiring the company. This makes sense as both Google and Facebook offer a replicate service of Yelp's business review model. Anthony continued that
Yahoo! Inc. YHOO could see revenue growth from a Yelp acquisition, but doing so fits poorly with its stated strategy. Not The First Time Yahoo Presented As Potential Buyer Tech Crunch reported in an article in 2010 that Yelp was in the final stages of negotiations to sell itself to Google for $550 million, but the deal was taken off the table after Yahoo reportedly offered $200 million more than Google had offered to acquire Yelp. Yelp asked Google if to match Yahoo's offer, but Google declined. Yelp's management team was apparently not interested in working for Yahoo. Regardless, Yelp's Board of Directors has a fiduciary duty to accept an offer that maximizes shareholder value, creating a conflict of interest between what is best for shareholders and management's wishes. Interestingly enough, Yahoo's current CEO Marissa Mayer was an executive at Google during its failed takeover of Yelp. Yelp's decision to continue operating as a stand-alone company appeared to be a smart move given its market share currently stands at around $3.71 billion. A few years later, Re/code reported in early 2014 that "most intriguing" for Yahoo (and most pricey and therefore most unlikely) would be an acquisition of Yelp. However, shares of Yelp were trading above the $5 billion valuation mark – likely preventing a deal from happening as Yahoo would likely have to pay a premium to the $5 billion valuation. Yahoo Now Joins A Lengthy Crowd Of Potential Suitors Christine Short at Estimize sent Benzinga a recent crowd update from the Mergerize platform. She noted that "the crowd had previously expected Yahoo to be the top candidate; however, more recently, traders have been predicting Google, Facebook and Apple Inc. AAPL have been viewed as potential bidders. Furthermore, Bloomberg reported that SunTrust Robinson Humphrey's Robert (Bob) Peck suggested on Thursday that shares of Yelp could be worth $66 per share in a takeout. Peck also added, Inc. AMZN, Priceline Group Inc PCLN, eBay Inc EBAY, Alibaba Group Holding Ltd BABA, Tripadvisor Inc TRIP and privately owned Uber to what is now a long list of potential buyers.
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Posted In: NewsAxion CapitalBob PeckChristine ShortEstimizeGooglelocalMergerizeRe CodeSunTrust Robinson HumphreyTech CrunchThe Wall Street JournalVictor Anthonyyelp
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