Microsoft is reportedly working with the Canada Pension Plan Investment Board and Silver Lake Partners, a private equity firm based in Menlo Park, Calif., to buy Yahoo.
The proposed deal is said to be gaining momentum, with Microsoft set to pay several billion dollars with Silver Lake and the CPP Investment board providing the rest of the equity. All of the money is being arranged and handled by unnamed banks.
However, Microsoft is not the only company considering Yahoo. The Wall Street Journal reports that at least nine private equity firms [are] studying a potential buyout. Some firms are reportedly willing to close the deal for between $16 and $18 per share.
One of Yahoo's suitors is Alibaba Group, based in China, despite the fact that U.S. laws governing foreign acquisitions could put a damper on a deal. Yahoo has a 40 percent stake in Alibaba, which is estimated to be worth more than $13 billion. News Corp is also interested.
The news comes just one day after Microsoft CEO Steve Ballmer bashed Yahoo at the Web 2.0 Summit in San Francisco.
When the event moderator John Battelle asked Ballmer if he was glad he didn't buy Yahoo, Ballmer laughed and replied, You know, times change. When you ask any CEO [that type of question] after the market has fallen apart, it's 'hallelujah.'
Sometimes, you're lucky, he added.
Microsoft has reportedly attempted to acquire Yahoo several times. In January 2008, the company offered Yahoo an unsolicited bid worth more than $44 billion, but Yahoo's management blocked the deal, which led to a steep drop in its stock price and the removal of then-CEO Jerry Yang. The two companies later agreed to a search partnership in December 2009.
Yahoo has continued to take a beating since Microsoft pulled out of its acquisition bid. In early 2008, Yahoo's shares were worth more than $29; when Carol Bartz was fired as company CEO, shares dropped to less than $15.
Yahoo stock closed Wednesday at $15.94 per share.
Microsoft and Yahoo did not respond to initial inquiry.