YP Holdings, the digital advertising business of what was formerly called Yellowpages.com, is planning to submit a first-round bid on Monday to merge with Yahoo, a source familiar with the matter said on Monday.
Yahoo, valued at about $34.6 billion, had extended a deadline to bid for its businesses by a week to April 18, technology news website Re/code reported last week.
Cerberus Capital Management-controlled YP could merge with a spun-off unit of Yahoo’s core business, a tax-free transaction called a Reverse Morris Trust, Bloomberg reported on Monday, citing people familiar with the matter.
Read more: Don’t Believe Everything You Read on the Yahoo Sale
Cerberus holds 53% of YP, while AT&T owns the remaining 47%, and if YP acquires Yahoo, AT&T could end up buying part of the Web company, Bloomberg said.
YP, valued at $1 billion to $1.5 billion, is working with Goldman Sachs Group to explore strategic alternatives, including selling itself, and has also held preliminary merger talks with GoDaddy, Bloomberg said.
Yahoo declined to comment. YP Holdings, Goldman Sachs, Cerberus, AT&T and GoDaddy could not be immediately reached for comment.
Yahoo shares moved briefly into positive territory on Monday after the Bloomberg report, but gave up those gains to trade down 0.15% at $36.46.