Bob Peck Believes Bids For Yahoo Could Come In Above $2-3 Billion
Robert "Bob" S. Peck of SunTrust Robinson Humphrey maintains a Buy rating on the company, with a price target of $44.
What Are They Bidding For?
Peck mentioned that the Wall Street Journal article “confirmed our expectation that the second round of bids are due in the first week of June, but that it isn't clear if this will be the final round.”
The analyst also stated that there was a lack of clarity regarding what was being bid for, given that Yahoo has several assets that it could potentially sell, with the IP alone potentially worth $1–$3 billion, real estate worth about $1 billion and perpetual royalties from Yahoo! Japan estimated at another $1 billion.
“We estimate the core generates ~$300 million of EBITDA; applying a 5x multiple gets to a $1.5 billion valuation. Hence, if Yahoo were selling only the core business, a $2–$3 billion valuation may be reasonable,” Peck explained.
In addition, the analyst pointed out that there still were multiple bidders, and it was possible that Yahoo was looking for “the cleanest way to maximize value.”
Peck believes that bids for the core could rise above the reported $2–$3 billion, depending on the assets that were included in the bids.
Latest Ratings for YHOO
|Oct 2016||MKM Partners||Maintains||Buy|
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