Warren Buffett and Dan Gilbert unite in bid to acquire Yahoo..Buffett takes a piece of Apple
Yahoo appears to be making progress in efforts to sell itself, despite some initial skepticism.
The latest piece of evidence: Among those vying for the company is the unusual combination of the investor Warren E. Buffett and Dan Gilbert, the founder of Quicken Loans and owner of the Cleveland Cavaliers.
That consortium is one of several suitors that have moved into the second round of bidding for Yahoo, according to people briefed on the matter.
Mr. Gilbert is leading the bid, said the people, who were not authorized to speak publicly. Mr. Buffett’s conglomerate, Berkshire Hathaway, is offering to provide financing, as he has done with the investment firm 3G Capital in its takeovers of H. J. Heinz and Kraft, and is leaving the negotiations to Mr. Gilbert, according to the people.
The unusual presence of Mr. Gilbert and Mr. Buffett in the bidding suggest just how far Yahoo and its advisers have cast their net to find potential buyers for the embattled Internet company.
The two are joined in the second round by a range of other bidders, including Verizon Communications and private equity firms such as TPG Capital and a group that comprises Bain Capital and Vista Equity Partners, people briefed on the process have previously said. Several other strategic bidders are also in the second round.
Yahoo declined to comment. Representatives for Quicken Loans and Berkshire did not return requests for comment.
The companies in the second round of bidding are seeking to buy one of the best-known names in Silicon Valley — though one that ceded a longtime hold on the Internet to younger rivals like Google and Facebook. Repeated efforts to reinvent itself, led by a string of chief executives, including the company’s current leader, Marissa Mayer, have failed to take hold.
As Yahoo and its bankers canvassed for preliminary bids, the company received criticism, including from some prospective bidders and from the activist hedge fund Starboard Value, over the state of the sales process.
Yet Yahoo can point to progress. It settled a looming board fight with Starboard, offering the investment firm four director seats. One of those is held by Starboard’s chief executive, Jeffrey Smith, who now sits on the special board committee overseeing the potential sale.
Yahoo executives, including Ms. Mayer, and advisers have been sitting down with bidders in the second round, furnishing those suitors with additional details.
Among them is Mr. Gilbert, who built his multibillion-dollar fortune with the financial empire. But he is also an active investor in his own right, having taken stakes in a number of online start-ups.
Gilbert was born to a Jewish family in Detroit, Michigan and grew up in Southfield, Michigan where he attended Southfield-Lathrup High School.
Daniel “Dan” Gilbert (born 17 January 1962) is the chairman and founder of Rock Ventures and Quicken LoansInc., the majority owner of the National Basketball Association’s Cleveland Cavaliers, the American Hockey League’sLake Erie Monsters, the Arena Football League’s Cleveland Gladiators and the NBA Development League’s Canton Charge. He is also the operator of the Quicken Loans Arena in Cleveland, Ohio and chairman of Rock Gaming, which opened its first Horseshoe Casino in downtown Cleveland in May 2012.
Warren Buffett’s Berkshire Hathaway Inc revealed a more than $1 billion stake in Apple Inc in a rare foray into the technology sector, which Buffett has largely shunned apart from a poorly performing investment in IBM.
Shares of Apple rose 3.7 percent on the news, closing up $3.36 at $93.88. Berkshire made its investment in the first quarter, before the iPhone maker in April reported its first quarterly revenue decline in 13 years.
The investment was announced amid an increasing view among investors that Apple may deserve a lower valuation because its heady growth days may be over. However, Apple has a strong balance sheet and management, attributes long favored by Berkshire.
“It makes sense because it’s a consumer company disguised as a technology company with a great business model, strong cash flow and a cheap valuation,” said Jeff Matthews, author of books about Buffett and a principal at the Ram Partners LP hedge fund. “It’s not a leap of faith.”
In a regulatory filing detailing most of its stock holdings, Berkshire said it held 9.81 million Apple shares worth $1.07 billion as of March 31.
The value of the stake has since fallen to about $921 million, even with Monday’s gain. Berkshire’s largest technology bet has been Buffett’s roughly $12.1 billion stake in International Business Machines Corp, an investment now more than $1.6 billion in the red.
warren is wading into the tech bubble..and will make a splash..hes after yahoo and has taken a bite out of apple..
check out his partner dan gilbert..
“The unusual presence of Mr. Gilbert and Mr. Buffett in the bidding suggest just how far Yahoo and its advisers have cast their net to find potential buyers for the embattled Internet company.”