Bids for the core assets of troubled Internet company Yahoo may come in at half the price originally expected.
According to the Wall Street Journal, though offers in the first round of bidding ranged from $4 billion to $8 billion, second round bids are expected to be substantially lower. Sources cited by the Journal now expect suitors to bid between $2 billion and $3 billion for the assets, though some offers could come in above that range.
CNBC on Friday, however, reported its sources said the information in the Wall Street Journal article is “completely wrong.”
The possible reduction in bid prices comes after Yahoo released a grim earnings report just after the close of the first round of bidding in which it revealed first quarter net revenue fell 18 percent year over year to $859 million. The company said it is expecting an even larger revenue drop of 20 percent in the three months ending in June.
Earlier this month, Yahoo also faced the loss of a longstanding contract with AT&T when the carrier decided to shift its web hosting over to Synacor, Inc.
But bidders have also reportedly been able to look beyond Yahoo’s public troubles to its private turmoil through presentations from CEO Marissa Mayer and access to a “data room” where internal details about the company’s financials and outlook were made available.
The deadline for the second round of bids is the first week in June. It is not known whether a third round of bidding will follow or if this is the final round, the Journal said.
Verizon is considered the leader in a pack of bidders that also includes equity firms TPG, Bain Capital LP and Vista Equity Partners and former Yahoo CEO Ross Levinsohn, the Wall Street Journal said.
