IACI Iac/Interactivecorp

By Chelsey Dulaney 

Yahoo Inc. said Friday that it has hired banking advisers and formed a special committee to explore its strategic alternatives, the latest indication that the Internet company is serious about pursuing a possible sale.

The company said the committee and its advisers--which include Goldman Sachs & Co. and J.P. Morgan Chase & Co.--are creating a process for reaching out to potential interested parties. Verizon Communications Inc. has been mentioned as a possible acquirer, and the company's financial chief called Yahoo's assets "intriguing" last month.

Other companies reportedly interested in Yahoo include The Wall Street Journal owner News Corp, IAC/InterActiveCorp and the private-equity firm TPG.

Yahoo said Friday that the committee will make recommendations about any potential transactions. The company, though, also reiterated its previously announced plan to split off its nearly $40 billion of holdings in Alibaba Group Holding Ltd.

Shares of Yahoo rose 1.9% to $29.97 each in morning trading in New York. Still, the stock price remains down more than 30% in the past year.

Yahoo had said earlier this month that it would explore strategic alternatives as part of a restructuring that will eliminate roughly 15% of its workforce.

The launch of a formal sale process entails setting up a virtual data room detailing the company's business metrics and proactively reaching out to the most likely potential buyers. Estimating the value of Yahoo's business is difficult, because investors ascribe a large portion of its value to its stakes in Alibaba and Yahoo Japan

The company has been facing pressure from shareholders, including activist investor Starboard Value LP, which has pushed for a sale of the company. The hedge fund also has called for the resignation of Chief Executive Marissa Mayer and threatened a proxy battle.

Ms. Mayer took the reins at Yahoo more than three years ago with plans to return the company to a growth rate on par with competing Internet companies such as Google Inc. and Facebook Inc. But Yahoo's costs have continued to rise, while its revenue has shrunk under her leadership. Her efforts also have been complicated in recent months by an exodus of top managers and growing impatience from investors.

In prepared statements Friday, Ms. Mayer reiterated that separating the Alibaba stake "is essential to maximizing value for our shareholders." Ms. Mayer added that "there are strategic alternatives that could help us achieve the separation, while strengthening our business."

Yahoo's move to explore its options sets the stage for a possible bidding war between a wide range of potential buyers. About 1 billion people a month travel collectively to Yahoo's home page, email and other sites, making them an attractive asset to media conglomerates, telecom giants and private-equity firms.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

(END) Dow Jones Newswires

February 19, 2016 10:21 ET (15:21 GMT)

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