Yahoo!, Inc. (YHOO) withdrew its offer to Hulu LLC, expressing a need to focus on its own affairs, reports the Wall Street Journal.Hulu is owned by News Corp (NWS), Walt Disney Co (DIS), Comcast Corp (CMCSA) and the private equity firm Providence Equity Partners.
The Race for Hulu Narrows to Three
DISH Network (DISH), Amazon, Inc. (AMZN) and Google, Inc. (GOOG) are each still in the running. Each has proposed a different arrangement based on its interpretation of the value of Hulu’s technology and its contract agreements. Further, unlike many other such deals, the Hulu deal requires a special complexity. The company requires offers be lined up in a specific format to enable an “apples-to-apples” comparison of its offers. Further, in addition to negotiating the deal with Hulu, separate deals are being negotiated with regards to content rights. DISH is reportedly offering the most, at $1.9 billion, while Amazon is coming in at a little less. Google had been the forerunner, offering the most, but also requiring the most in return. It had pulled out but recently returned to the running.
Why Not Yahoo?
Yahoo, who had made the initial approach to Hulu, is in the middle of a strategic review. It has begun sending out confidentiality agreements in the preparation for issuance of financial data.
Moreover, there is also the rumor that Yahoo will be up for sale itself. It is well known that Alibaba is looking to buy back the 40% stake that Yahoo bought in the company 6 years ago and chairman Jack Ma has said that he was very interested in buying Yahoo.