Verizon is closing in on a deal to buy Yahoo’s core business for about $5 billion, according to sources familiar with the talks.
The telco giant has long been considered the favorite to buy Yahoo’s internet assets, which it wants to combine with AOL, which it bought last year for $4.4 billion.
Part of Verizon’s pitch to Yahoo’s board is that it is the logical choice, since it is already operating a similar business. The concept of such a deal is to combine its advertising tech assets and become the third alternative to leaders Facebook and Google. Both companies also have extensive media assets.
"If Verizon bid that high, they definitely got it, because they’re the safe bet for Yahoo," said a rival bidder.
And insider sources at Yahoo, whose efforts are being led by board member Tom McInerney, also said that it wanted a deal that was easiest to close. "There is no worry with Verizon about financing or as many questions about integration," said one source. "It can swallow this without a lot of trouble."
And Verizon raised the price it was willing to pay in its most recent offer for Yahoo, delivered this week. But some members of Verizon’s board had previously expressed concern about the deal’s price tag and were worried about other costs. That includes the revelation that search partner Mozilla had been given advantageous and pricey termination terms in a deal struck by Yahoo CEO Marissa Mayer.
Speaking of Mayer, if the transaction is completed it would be an ironic turn, given that a key exec on the Verizon side is AOL’s Tim Armstrong. He and Mayer worked together at Google many years ago. And most importantly, as recently as two years ago, Mayer had rejected Armstrong’s efforts to merge the two companies. AOL went with Verizon, which would now be swallowing up Yahoo.
Yes, the snake eventually eats itself! Also, Armstrong is a very good salesman!
But the deal is not done. As recently as yesterday, Yahoo was asking an investor group led by Quicken Loans’ Dan Gilbert for more details on their offer. Private equity firm TPG has also been very aggressive in the bidding.
Bloomberg, as well as CNBC, earlier reported that Verizon was in exclusive talks to buy Yahoo.
Tim Armstrong on the Sale of AOL to Verizon in 2015
This article originally appeared on Recode.net.