Warren Buffett And Quicken Founder Considering Yahoo Bid

It has been reported by Reuters on May 14 that billionaire Warren Buffett has joined the bidding race. The famed chairman of Berkshire Hathaway Inc is backing a consortium that includes Quicken Loans founder Dan Gilbert in bidding for Yahoo’s internal assets. It has been long speculated that Yahoo may sell its internet business due to stagnant growth and falling stock prices in recent times, and it finally opened up for bids in April.

Billionaire Warren Buffett said to be eyeing Yahoo bid https://t.co/hRWvW5fHhn pic.twitter.com/9wTCIqcGJX

— CNET (@CNET) May 15, 2016

There is still no certainty regarding the consortium’s ability to buy out Yahoo in the auction, but the interest shown by Warren Buffett and Dan Gilbert is indeed good news for Yahoo. The Sunnyvale, California-based company that had been synonymous with the Internet for over two decades has struggled in recent years due to being surpassed by rivals such as Alphabet Inc. (parent company of Google) and others in both online user base and advertising dollars.

Bidding had already entered its second round in the previous week. Among the other companies being challenged by the consortium is Verizon Communications Inc, which is the favorite at the moment due to having acquired AOL in 2015 for $4.4 billion. There’s also the parent company of the Yellow Pages, as well as the telecommunications company TPG that is interested in Yahoo’s advertising technology.

So far, the consortium’s plans for Yahoo are confidential, and whatever rumors may be circulating at the moment are unconfirmed. It’s not certain whether Warren Buffett plans to add Yahoo to Berkshire Hathaway, a holding company that has ownership of companies like Geico and IBM. He did mention in an earlier interview with CNBC that “something has to change there” in regard to Yahoo.

While Warren Buffett’s participation has garnered much attention, Dan Gilbert being in the mix is also important. The founder of Quicken Loans is a billionaire who also founded Rock Ventures and Jack Entertainment, and he is also the majority owner of the NBA’s Cleveland Cavaliers, among many other American sports teams in various leagues. Dan Gilbert is leading the bid for the consortium, while Warren Buffett is providing additional backing to help push it through.

As of now, all parties involved in the bidding process are not providing any comment regarding details of the proceedings, which are meant to be confidential. That includes Yahoo, Quicken Loans on behalf of Dan Gilbert, and Warren Buffett himself. All that is known so far is that Yahoo has shortlisted close to ten bidders in the auction, most of which are from private equity firms.

Meanwhile, the first round of bidding was met by dissatisfaction by some bidders due to disorganization and confusion during the process. Current Yahoo CEO Marissa Mayer was said to be “not very committed to selling the business,” although this may no longer be the case as she has become more involved in the process lately. This may be due to a reported severance package worth almost $55 million once a “change of control” of the company takes effect. Compensation for her services as Yahoo CEO dropped by 15 percent from 2014 amid troubles in 2015, going from $42 million to $36 million.

The list of bidders for Yahoo’s core assets is expected to dwindle down as the auction proceeds to its latter stages. Other than the company’s acquisition of the blogging site Tumblr, Yahoo has not seen much growth in recent years. Due to this long period of stagnancy, the activist hedge fund Starboard pushed for the sale of Yahoo’s assets earlier this year—an effort that won out and gained Starboard four board seats in the company.

[Image via Paul Morigi/Getty Images for Fortune/Time Inc]