Yahoo Shares Leap on Possible Acquisition

Former AOL chief executive Jonathan Miller is trying to raise money to buy part or all of Yahoo, The Wall Street Journal reported on Tuesday.

Shares of Yahoo rose more than 9 percent after the report, which cited people familiar with the matter.

However, a buyout is still far from certain: Sources close to the Yahoo board and Miller told CNBC Tuesday that it's highly unlikely that Miller will try to buy the Internet search and advertising firm. (See the accompanying video for more.)

Miller could not be reached for comment.

Miller is a partner at Velocity Interactive Group, an investment firm focused on digital media. The Journal reported he wants to raise the funds to buy Yahoo for $20 to $22 a share, or $28 billion to $30 billion.

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But raising so much money in the current market environment may be tough, with banks unwilling to lend and several deals falling apart as companies find it nearly impossible to issue debt to finance acquisitions.

Paul Sakuma / AP

Speculation about possible deals has been widespread after Microsoft withdrew a $47.5 billion offer to buy Yahoo in May after Yahoo's board and its then-CEO Jerry Yang rejected it as too low.

According to the Journal, Miller has talked to private equity investors and sovereign wealth funds for months about raising money for a deal.

Sovereign wealth funds may yet come to Yahoo's rescue. Earlier this year, Advanced Micro Devices secured substantial investment from a venture capital firm owned by the Abu Dhabi government for a $5.7 billion joint venture.

Yet, Yahoo faces multiple challenges, including a search for a new CEO after co-founder Yang stepped down last month and coping with a shrinking display advertising market.

Moreover, investors may be unwilling to part with so much cash to buy the company.

Miller has discussed the idea with some Yahoo board members but it has not come up for an official board discussion yet, the Journal reported.

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Spokespersons for Velocity, where Miller is a partner, and Yahoo, declined comment.

Miller led AOL, Time Warner's online advertising division, from 2002 to 2006.

Yahoo shares, which have lost more than 65 percent of their value since Microsoft first made its offer, were up 5 percent at $11.29 in afternoon Nasdaq trading.

- Reuters contributed to this report.

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