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A consortium of big capitalists: Bain Capital and Blackstone Group, along with various Asian partners is getting ready to bid for Yahoo Inc. for a possible $25 billion deal.

The consortium includes Japan’s Softbank and China’s Alibaba. E-commerce giant Alibaba’s main interest in participating in the bid is rooted in its desire to buy back the 40 percent stake from Yahoo. However, according to Alibaba Group representative John Spelich, the company is unsure of whether to participate in the whole company bid or not, and is still considering various options.

Yahoo’s shares is valued above $20 billion after shares closed at $15.71 last Wednesday on the New York Stock Exchange and increased to $16.72 in after-hours trading.

Potential Players in the Yahoo Inc. Deal

According to an analyst from JP Morgan, what is definite is Alibaba wants to take its stake back from Yahoo, and will do whatever is necessary to make it happen. As for being able to have sufficient money to close the deal, Alibaba may resort to borrowing funds or finding a buyer, potentially using Yahoo Inc.’s asset and Alibaba’s asset as collateral. Founder and CEO of Alibaba Jack Ma should have no problem financing the deal, being a billionaire himself and having ties with groups of investors and several of the worlds’s known private equity funds.

Yahoo Inc. currently has 1.24 billion outstanding shares and bid on Yahoo Inc. of anything above $20 per share is easily a deal worth $25 billion, and if all goes well for Yahoo, the deal can probably be the biggest buyout using a considerable amount of borrowed money in recent years.

Yahoo and other companies participating in the acquisition decline to comment on the upcoming deal.

Yahoo’s board received two offers already for a minority stake, and these offers came from the group of Silver Lake and software giant Microsoft Corp., and TPG Capital.

Thomas H. Lee Partners, a private equity company, expressed interest in purchasing Yahoo’s U.S. branch. Other equity partners interested in the Yahoo acquisition are Hellman & Friedman and Providence Equity Partners.

Blackstone and Bain, two strong buyout firms with records of teaming together in acquiring companies are setting their sights on Yahoo Inc. These two firms acquired Michaels Stores Inc. in 2006 and in partnership with NBC Universal, acquired the Weather Channel in 2008.

Yahoo’s Growth Reaching a Plateau

Yahoo has reached a plateau when it comes to growth largely because of strong competitions from giants Google and Facebook. At present, Yahoo has no permanent CEO. Last September, Yahoo’s board of directors fired CEO Carol Bartz. The board also initiated a strategic evaluation, which was further complicated by the fact that there are many players involved with a say in the matter, namely co-founders and partners David Filo and Jerry Yang, shareholders and the board. Each of these players has different agendas.

Mr. Yang is leaning towards making Yahoo a private company and is considering dealing with private equity firm partly because he sees this as the best way to retain involvement with the company.

Kimberly is a researcher, writer, business woman, and contributor at entrepreneurweek.com blog network.  She may be reached at eweekcomauthor@gmail.com.

©2011 entrepreneurweek.com, all rights reserved

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November 8, 2011, Tuesday morning in Tokyo, Japan’s Olympus Corporation disclosed that the company has been using purchase of Gyrus, a British medical equipment company and other series of acquisitions as a means to hide security investment losses for more than two decades. The announcement resulted to the plummeting of Olympus shares down to 29 percent, a 16-year low.

One of the Biggest Accounting Fraud Cases

The admittance that the company is using $1 billion merger payouts to cover years of losses in investments could make the case one of the biggest cases of accounting fraud in corporate history. Analysts and lawyers said that with Olympus’ revelation, the future of the company is not too bright with the likelihood of criminal charges and shareholders lawsuits against people involved and Olympus’ delisting from Tokyo Stock Exchange (TSE).

The Tuesday morning announcement sheds light to the saga that started even before former British CEO turned whistleblower Michael Woodford was fired on October 14. The company fired Mr. Woodford citing failure to understand Japanese culture and the company’s management style as reasons for the termination. Woodford said otherwise, stating that he was fired because he questioned the $687 million expenses paid for acquisition advice on the the $2 billion Gyrus deal in 2008, the biggest merger and acquisition fee in history. Aside from the Gyrus deal, he also questioned the expensive acquisitions of three small Japanese firms, whose value has been largely written off following the purchase.

After the announcement, Mr. Woodford called for resignation of the Olympus board, saying that the board and non-executive position is now “untenable”. He also expressed intention of returning to the company if the shareholders want to put him back in his former position.

Mr. Woodford was not the first one to be let go in relation to the shady deals. In May of 2009, Tsuyoshi Kikukawa, the company’s former president made an announcement that they are ending the contract with global accounting firm KPMG and that Ernst & Young will take over. In a confidential letter sent to Olympus executives based in United States and Europe, the former president cited disagreement with auditors of KPMG. Twelve days after Mr. Woodford’s termination, Mr. Kikukawa resigned to placate upset shareholders, and Shuichi Takayama took over the vacated position.

A Case of Flawed Leadership

Mr. Takayama cited Former President and Chairman Tsuyoshi Kikukawa, Vice President Hisahi Mori and Internal Auditor Hideo Yamada as some of the executives responsible for the cover-up and that the company is considering criminal complaints against them. He is unable to disclose the exact magnitude of losses or other details related to it, since all the data have already been sent to an independent panel.

Biggest non-Japanese Olympus shareholder Josh Shores of Southeastern Asset Management demanded replacement of the entire Olympus board. According to Mr. Shores, ignorance is not a defense, and every board member should leave. Board members who were there and not aware of what has happened were incompetent, and those who were there and aware of it and have not raised questions are negligent.

Possible Criminal Charges

Olympus’ representatives could potentially face a maximum of 10 years in prison or up to 10 million yen in fine if they were proven to knowingly falsify consolidated financial statements considered material in nature. There is also a possibility for external auditors to be held responsible as well. Authorities from the Tokyo Stock Exchange, Federal Bureau of Investigation and Security and Exchange Commission are now investigating the case.

Kimberly is a researcher, writer, business woman, and contributor at entrepreneurweek.com blog network.  She may be reached at eweekcomauthor@gmail.com.

©2011 entrepreneurweek.com, all rights reserved

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The sports industry is becoming one of the fastest growing industries in the world, generating billions of revenues annually. While major corporations or companies continue to dominate the industry, small business companies and entrepreneurs are also getting their own considerable share of the pie, thanks to emerging new needs generated by constant change in lifestyle, attitudes and habits of consumers.

Sports Carving a Niche in Battling Obesity

Governments in several parts of the world are implementing initiatives to promote the importance of living a dynamic, active lifestyle in winning the fight against obesity and cardiovascular disease. According to World Health Organization, since 1980, the number of obese people in the world has more than doubled and that in 2008, 1.5 billion people aged 20 years old and older are overweight and 500 million are obese. These numbers are projected to climb to 2.3 billion and 700 million by 2015, respectively.

In the past, obesity was just a problem in industrialized countries, but now, it is becoming an issue with low per capita income nations. The alarming increase in the number of overweight and obesity cases is creating various health consequences and is dramatically affecting a country’s healthcare expenditures. Consequently, there is a growing emergence of government and non-government initiatives to encourage a healthy lifestyle and promote sports participation.

The increasing awareness on the importance of sports in health is creating considerable opportunities for entrepreneurs who want to enter in the sports industry. With more people wanting to engage in sports, there is a growing demand for affordable equipment and apparel desired or needed to engage in fitness activities or sports. There are also opportunities in sports facilities and venues. Opportunities are also opening up in areas of sports service businesses from sports marketing research, for entrepreneurs wanting to start their own sports business, to service businesses offering lessons encompassing various aspects of sports.

Synthesis of Lifestyle and Sports

Gone are the days, when there is a distinct line, which separates athletics from lifestyle. As the line between sports and lifestyle continues to blur, with sports becoming a more fundamental part for most consumers, there will be an increase in demand for products and services related to leisure or recreational sports.

The future of global sports lifestyle market is expected to surpass performance market. Sports entrepreneurs engaged in sports equipment and apparel business are gearing towards incorporating styles and features in their products for leisure-oriented use. With more consumers engaging in recreational sports and activities, such as bicycling, camping, mountain climbing, and boating, among others, there is a growing demand for products related to these, from how-to websites and books, to apparel and goods.

Mergence of Sports, Technology and Media

Like in any other business, technology and new media in sports cannot be ignored. Thanks to technology, sports fans can have access to their favorite sports anywhere. Today’s fans are obsessed with sports, and are willing to spend money to enhance their fan experience. Entrepreneurs who can create product or services to address this growing need are likely to see prosperous years ahead.

Online sport media businesses focusing on a particular sport and trade magazines targeted towards sport industry business are flourishing. Various opportunities abound in interactive sports software and website development with the growing demand for online sports games and video games. Companies or individual entrepreneurs engaged in the development of sports-related applications for iPhone and Android phones are emerging as winners in the profit race.

Sports and Going Green

Today’s consumers are becoming more aware of how their consumption affects the environment. Because of this, there is a growing demand for sports products that are environmentally or eco friendly. Sports entrepreneurs who can create meaningful product platforms to address this area, such as products and packaging designed with sustainability principles taken into account are likely to win the hearts of consumers.

Emerging Opportunities in Sports Medicine

As the level of participation in physical activities and sports from all age groups continues to increase, the demand for sports medicine continues to grow as well. Sports entrepreneurs who can take advantage of available advancements in technology and sports medicine research and incorporate it in a facility, which can offer athletic training services and sports-enhancement programs, on top of the usual physical therapy services are sure to find themselves with an added advantage.

Sports Travel and Tourism, A Worldwide Phenomenon

With increase in leisure time and spending, and growing appetite for participation and spectacle, global sports industry are seeing rapid changes and innovation. These changes resulted in growth in domestic and international travels for sports purposes.

Economies of towns, areas and even countries have growing reliance on participative and spectator sports, and a growing number of businesses are venturing into developing sports tourism package or into professional management and marketing of sports events.

Exodus from Mass Wear to Personalization and Customization

Consumer’s attitude and preference are changing. There is a growing preference on variety and choices that go beyond companies merely offering a wide selection of products. Companies, which can offer relevant and unique products suitable for a specific aesthetic and functional needs, by offering several customization and personalization platforms, are creating strategic opportunities. Perfect examples are companies, which enable consumers to design and order their own sporting goods such as footwear, apparel or hardware.

Increasing Demand for Functional Products

In recent years, consumers have realized the value of functional products and have grown wiser in their purchase decisions. Aesthetics and brand name have taken the back seat in consumer preferences. Athletes and sports enthusiasts are moving towards minimalistic, lightweight and flexible products that promote the natural movement of the body, from apparel and footwear, to sports equipment.

In sports apparel, new companies have taken in quite a following after introducing affordable sportswear with improved moisture management, exemplary ease of motion and added comfort.

Kimberly is an internet researcher, writer, and contributor at entrepreneurweek.com blog network.  She may be reached at eweekcomauthor@gmail.com.

©2011 entrepreneurweek.com, all rights reserved

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Just like any groundbreaking industry, the past of biotechnology has been marred with unrealistic expectations. Although each of the recent biotechnology startups seems to be an improvement from their past counterparts, these companies still appear to lean towards the tendency to overvalue their revenue projections and undervalue the breakeven time. They appear as if their need for capital is more than expected, and that even an experienced management team will not prevent them from running into unexpected challenges.

Although it may be beyond reason to anticipate future startups to be wiser and better at foreseeing challenges than past startups, it is to every entrepreneur’s benefit to be more conventional in their monetary projections and capital market estimations.

With the increasing regulations in healthcare, biotechnology entrepreneurs, who are planning to launch their startup companies, should be ready to launch their product in a market, which is more sensitive to prices.

As the industry gain more experience in developing new drugs, predicting how well new drugs will perform in the market should be easier than it was in the past. However, it is also important to note that since there are many similar drugs in the market, drug companies have to go through longer, larger and more financially draining trials in order to prove the drug’s edge over existing diagnostic or treatment process. It is still hard to determine whether continuous innovation will play a part in developing efficiency. Over the last two decades, costs associated with developing new drugs have increased steadily.

Biotechnology entrepreneurs might have to change the rules in order to achieve efficiency in the way they get new drugs to market, and ultimately contain cost. There are several ways to accomplish this, and these are through Pharmacogenomics, repositioning and reformation of existing product and product incubation.

Taking Advantage of Pharmacogenomics

A person’s response to a particular drug is a complex trait reliant on many different genes. Pharmacogenomics refers to the study of the inherited variations in genes that determine the person’s reaction or response to drugs and how the variations can be used in forecasting a person’s response to the drugs, whether good, bad or neutral.

Currently, there is an ongoing race to catalog as much genetic variations located within a human genome as possible. These variations are referred to as SNPs or Single Nucleotide Polymorphisms, which can be used as a tool to predict an individual’s drug reaction

Biotechnology entrepreneurs representing companies, which engage in drug development and testing, such as pharmaceutical companies, can reap immense benefit from SNP screenings. They can use Pharmacogenomics as a tool in selecting patients who are more likely to respond positively to treatments. By doing so, the number of patients needed to participate in clinical trials will be greatly reduced, which in effect can decrease the costs and time associated with clinical trials. Consumers will end up benefitting from this through reduction in the cost of drug. Instead of the usual method of trial and error used in matching the right drugs with patients, companies will be able to analyze patient’s genetic make-up and give the best drug therapy from the beginning.

Not only that, but by excluding people whose pharmagenomic screening shows that the drug being tested has negative or no effect to them, companies are likely to highlight the drug’s usefulness to a particular group of patients, which consequently increases the drug’s chance to make it to the marketplace.

By being able to forecast a person’s reaction to a drug before prescription, doctors will be more confident in prescribing the drugs and patients will be more confident in taking them. Because of this, emergence of companies wanting to develop new drugs tested in the like manner is likely to see a surge.

Repositioning and Reformulation of Existing Product

More and more biotechnology companies are discovering the advantages of product repositioning over drug discovery. There is an emerging trend on companies giving up on the freshness and innovation of discovering new drugs to pursue a more cost and time efficient commercialization of old drugs using new methods. Companies are letting go of their discovery-based model and are adopting new business models to cut time and cost. A great example of companies employing alternative business models are biotech companies who are having their partially or fully developed drugs licensed for a completely new market, indication and formulation. Some companies are gearing towards reformulation, wherein they are making their generic drugs significantly better by reformulating them. Other companies venture into creating combination products for new or known indications by combining two or more co-formulated drugs.

There is usually more knowledge and better understanding associated with old drugs, making product repositioning and reformulation a viable alternative to new drug discovery, since they involve low cost and risk. The repositioned drug may have to use the patents for methods of use to discourage generic competition. As the cost of developing new drug continues to grow, this trade-off is worth considering.

On the other hand, it is possible that there will come a time when there will no longer be an availability of drug candidates in late stages of development, and companies who are pursuing the repositioning strategy may eventually have to go back to discovering new drugs or to start considering paying others to do it for them.

Product Incubation

The increasing demand for late-stage drug candidates is opening up opportunities for academic research companies. These companies are sticking with the discovery-based model to discover drugs and bring them to late-stage. Their goal will be to take advantage of the funds available, whether philanthropic, public, or corporate, to come up with drug candidates that are validated clinically and have an existing market to license them.

Entrepreneurship in the biotechnology industry is still without a doubt, a cutting edge. Today, it is easy for companies to lose sight of profits due to the need to develop new technology, raise capital or secure partner. A successful biotechnology entrepreneur should know that these are not ends by themselves.

Kimberly is an internet researcher, writer, and contributor at entrepreneurweek.com blog network.  He may be reached at eweekcomauthor@gmail.com.

©2011 entrepreneurweek.com, all rights reserved