Yahoo shares rise 5% amid rumours of private equity bid

Image caption,
Yahoo wants to catch up rivals such as Microsoft and Google

Yahoo shares have risen sharply amid rumours that it is about to be bought.

Its shares jumped almost 6% to $17.60 at the start of trading in New York, before dropping back to end 2.2% ahead.

Unconfirmed media reports have claimed that a number of investment firms are preparing a deal that would take Yahoo private.

E-commerce firm Alibaba declined to comment on reports that its chairman had been approached to head a takeover of Yahoo.

Meanwhile, the New York Post said that private equity giant KKR was interested in either taking Yahoo private or helping to finance a deal.

And AOL is also reported to be among the firms eyeing the possibility of buying Yahoo.

AOL has been on a buying spree as it tries to revive itself as an online content company.

It merged with Time Warner in 2001 at the height of the dot-com boom in what is widely seen as one of the most disastrous mergers ever. It was spun off by Time Warner in December into an independent company.

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