NEW YORK (Reuters) - Ivory Investment Management LP, which owns 1.5 percent of shares of Yahoo Inc, urged the Internet company to sell its search business to Microsoft Corp, saying such a deal could more than double Yahoo's value.
Ivory proposed in a letter to Yahoo's board that it salvage a deal with Microsoft, which had failed earlier this year to buy Yahoo after offering as much as $33 a share. The software company had also tried to buy Yahoo's search business, but was turned down.
Yahoo shares were trading at $12.67 pre-market on Wednesday, up 4 percent from their Nasdaq close on Tuesday.
"We believe a search deal with Microsoft could deliver value to Yahoo shareholders of $24-29 per share, or more than double yesterday's closing price of $12.19," Ivory Managing Partner Curtis Macnguyen wrote in the letter.
"We envision a deal whereby Microsoft would acquire all of Yahoo's search assets and enter into a perpetual agreement for Microsoft to be the search provider for all Yahoo properties," the letter said.