All signs point toward Verizon acquiring Yahoo‘s core digital assets for around $5 billion on Monday, and Yahoo investors are signaling their support. The company’s shares are nearing $40, after rising steadily in value this past week.
Yahoo shares haven’t trading been this high since last July, when Marissa Mayer had investors convinced she could orchestrate a tax-free spin-off of the company’s 15% stake in Alibaba. But that plan soon fell apart, adding to Mayer’s mounting troubles. Three years into Mayer becoming CEO, Yahoo had barely moved the needle on key revenue categories—and mobile in particular. Before long, board members and activist shareholders demanded the company explore “strategic alternatives,” including a sale of its core business.
For Verizon, the timing was fortuitous. The telecom giant had recently completed its acquisition of AOL for $4.4 billion, and was looking for ways to quickly double-down on its investment in new media. Verizon is the only final-round bidder to offer Yahoo’s board a strategic fit, through the promise of a combined AOL-Yahoo.