Yahoo CEO Marissa Mayer
Photograph by Stuart Isett — Fortune Global Forum

Yahoo may be heading into its final act as an independent company.

By Dan Primack
December 2, 2015

Today’s deal buzz is a Wall Street Journal story about how Yahoo’s board is “planning a series of meetings this week to consider selling off the company’s flagging Internet businesses and how to make the most of its valuable stake in Chinese e-commerce powerhouse Alibaba Group.”

I’ve so far had a handful of conversations with folks who are either close to Yahoo YHOO or potential bidders (including within the past hour), and here is what I’m hearing so far:

1. Legit? Despite the WSJ portrayal, these are not meetings that are being specially called to discuss a sale. These are the company’s regularly-scheduled financial planning meetings. So of course an evaluation of strategic options will be included, particularly for a company under activist pressure that has recently lost so many senior executives.

That said, a sale of “core Yahoo” — or at least a serious attempt — does seem likely, perhaps as early as Q1 2016.

2. Financial sponsors? Private equity will certainly take a hard look, particularly those firms that had conducted due diligence back in 2011 (here’s a refresher). The real question, however, is if private equity could find enough leverage to make such a deal work. Big consumer tech deals are few and far between (is Skype the last?), and the pricing on this would be particularly tricky. Do you pay a premium to EBIDTA, even though the actual stock market is effectively valuing Yahoo’s core business (ex-Alibaba BABA and cash on hand) at zero? If private equity were to buy, one would imagine it would do a lot of cutting, in order to grow a smaller core of homepage, Tumblr, news, sports and mail (i.e., cut to expand, destroy to create, etc.). Then try to flip it to a strategic.

3. Then who? Strategics are a better fit. Not only because they needn’t find the debt, but because they could make better immediate use of Yahoo’s large user base. Expect Comcast CMSCA , AT&T T and Verizon VZ to have interest (yes, Verizon already bought AOL, but that was more for the ad biz).

4. Not a break-up: Yahoo’s properties are so tightly integrated on the back-end — including the basic username/email indentifiers — that it would be very hard for the company to sell Sports to one party, Mail to another, etc.

5. Marissa: At this point there is a good argument to be made that Yahoo originally needed more of a financial wizard than a product ace at the helm, but that’s all water under the bridge. There has been a lot of speculation over whether or not Mayer will keep her job, but it’s hard to imagine the board dumps her if it actively pursues a sale. Let the buyer decide who they want to run things. Promoting a board member to something like executive chair, on the other hand…

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