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Many M&A experts have considered Microsoft (NASDAQ: MSFT) or private equity interests like Silver Lake to be the most likely buyers of Yahoo! Instead, it appears that founder Jerry Yang and Alibaba (financed by Singapore sovereign fund Tamesak) may be the most aggressive suitors. These suitors must see something in Yahoo! that many analysts say is not there. Or, they may see substantial value in Yahoo! as it is broken into parts

Alibaba, one of China’s largest e-commerce companies (of which Yahoo! owns 40%),  has expressed interest. Alibaba’s CEO, Jack Ma, said he thinks a transaction would be attractive, but the Committee on Foreign Investment in the United States might block the Chinese ownership of a large American internet company. Alibaba does not appear to be bothered by this, considering it has approached Tamesak. What would Singapore’s sovereign fund see in Yahoo!? Obviously a substantial benefit in a Alibaba deal. The fact that a fund from around the world would consider helping Alibaba outbid U.S. financial firms is extraordinary. It shows a level of faith in Ma that U.S. analysts — who consider his offer a bluff to get Yahoo! to sell its stake in Alibaba back to him — do not have.

Jerry Yang is another unexpected bidder. He does have an inside track as one of the company’s founders. He and cofounder David Filo own about a third of Yahoo!’s shares, which would make a transaction less expensive. Yang was fired as CEO two years ago. He may want that job back. He also may see value as a board member that Wall St. analysts — who do not expect the company to grow — do not see.

The more improbable the buyers, the more likely there is some value in Yahoo! that is not unlocked. Private equity firms are experts at finding hidden value, if a company has value beyond its share price. But their offers may come after buyers who were not in the game just a few weeks ago, and for various reasons were not expected to be at all.

Douglas A. McIntyre