The parent of Britain's Daily Mail said on Wednesday it had not submitted it's own bid to buy Yahoo Inc's core Internet business, but was still in talks to partner with other suitors of the US company.
Yahoo, which has been struggling with falling ad revenue for years, has sped up the process to sell its media, email and other web businesses, bowing to pressure from activist shareholder Starboard Value LP and others.
Shares of Yahoo rose as much as 5 per cent on Wednesday, as investors digested the company's slightly better-than-expected quarterly results late on Tuesday and CEO Marissa Mayer's reassurances that she was focused on the sale.
Yahoo's advisers are working through offers to put together a short list, and Verizon Communications Inc was set to advance to the second stage of bidding for the internet company's core assets, Reuters reported, citing sources.
Daily Mail & General Trust Plc said last week it was in talks with potential partners to mount a joint bid for Yahoo's internet assets.
Buying Yahoo's core assets - which include a search engine and email, news and sports services - would boost Daily Mail's online reach and digital ad revenue from its globally popular websites, and partly offset shrinking print revenue.
Private-equity firms Apax Partners LLP, TPG Capital LP, Bain Capital LLC, Apollo Global Management LLC and Warburg Pincus LLC have also submitted first-round bids, according to sources.
As well, the auction has attracted interest from Japanese online retailer Rakuten Inc and Yellow Pages owner YP LLC, which is backed by AT&T Corp.
While investors seemed pacified by Yahoo's results and the progress on the sale, analysts said the company management's failure to address key questions about the bidding process had added a level of uncertainty. "We were hoping that (Mayer) would provide more colour on what was for sale ... and timing around the process," Neil Doshi, an analyst at Mizuho Securities USA said in a note. "Too little, too late" was how Barclays analyst Paul Vogel characterized Yahoo's renewed focus on mobile and video search initiatives.
However, Barclays, Mizuho and at least 9 other brokerages raised their price targets on Yahoo's stock, mostly based on the change in the value of Yahoo's Asian assets.
Oppenheimer was the most bullish, raising its target to $49 (S$66) from $40. The median price target on the stock is $40.