Three buyout groups join final bid round for Yahoo

Private equity suitors TPG, Advent International and a partnership of Sycamore Partners and Vector Capital Management are into the final round of bidding for Yahoo, said people familiar with the matter.

The three buyout groups join Verizon Communications, AT&T and Quicken Loans founder Dan Gilbert in the last weeks of bidding, with each vying to win Yahoo’s Internet business and some of its intellectual property and real estate assets.

All of the offers, except for Verizon’s, value Yahoo from about $4 billion to $6 billion, said one of the people, all of whom asked not to be identified. Verizon’s bid was lower — from $3.75 billion to $4 billion — because it doesn’t include Yahoo’s patents and real estate, the person said. Verizon would be willing to acquire both additional assets, people familiar with the matter said last week.

The bids are difficult to compare, because each includes a different amount of Yahoo’s intellectual property, the people said. Assessing offers for assets extended the auction, they said.

Buyout firm TPG offered from $5 billion to $6 billion for Yahoo’s internet business, patents and real estate. TPG, which sees itself as Yahoo’s best chance for a turnaround, has had preliminary talks with strategic partners, although it bids alone, one of the people said.

A winning bidder will probably be chosen early next month, the people said.

Sycamore and Vector, two investment firms that have teamed to bid, typically invest in smaller assets. Sycamore focuses on retail and consumer investments, and owns stakes in shoe retailer Nine West Holdings and department store chain Belk, according to its website. Vector invests in tech companies including Gerber Scientific and Triton Digital. Sycamore and Vector probably don’t have the capital resources to win, one of the people said.

Apax Partners and a group comprising Bain Capital and Vista Equity Partners are no longer involved, the people said.

AT&T and Gilbert, whose effort is backed by Warren Buffett, each bid about $5 billion for Yahoo, including at least some of its patents, as well as the real estate assets, people with knowledge of the matter said last week.

Representatives for Apax, AT&T, TPG, Sycamore, Verizon and Yahoo declined to comment. Representatives for Advent, Bain, Vector, Gilbert and Vista didn’t immediately respond to requests.