Microsoft Tells Possible Yahoo Buyers It Would Consider Backing Bids With Big Bucks

According to numerous sources, Microsoft execs have been meeting with private equity firms mulling bids to buy Yahoo and telling investors the company might be willing to lend significant financing to their efforts.
As most know, Yahoo has said it is for sale. Some question the company's commitment to the process, given how glacial it has been, which many attribute to CEO Marissa Mayer's antipathy toward it, favoring her own turnaround efforts instead.
Today, activist shareholder Starboard Value said as much, mounting a long expected proxy challenge to Yahoo and naming its own slate of directors to replace current ones.
Starboard's Jeff Smith noted that the new board was needed to bring "credibility to a process that has been publicly criticized repeatedly for being too slow, fraught with conflicts of interest and very difficult for highly qualified and motivated strategic and financial buyers to access much needed diligence information."
Every single possible buyer I have spoken too this week agreed in spades, with many calling the Yahoo sale effort a farce. The current Yahoo board has said it is not, but the credibility of the current Yahoo board is — let's be honest — under some much deserved scrutiny.

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In any case, adding Microsoft into the mix does give this process some seriousness. Microsoft's partnerships and acquisition strategy head Peggy Johnson is part of the effort, as well as others at Microsoft, sources said (you can hear my Re/code Decode podcast interview with her from last fall below).
To be clear, the software giant has made no commitments so far to any investors and any discussions now are exploratory. But sources said that the reason for providing financing would be because Microsoft wants to ensure that if Yahoo is sold that whoever buys it will be a good partner going forward. That makes sense, since Microsoft has close search and advertising ties with Yahoo, part of a longtime partnership.
That deal was struck after Microsoft made a hostile bid to buy Yahoo in 2008. At the time, former CEO Steve Ballmer offered $31 a share, which then was worth about $45 billion.