Former AOL Chief Executive Possible Yahoo Bidder

According to WSJ, former AOL (TWX) Chief Executive Jonathan Miller is trying to raise money to buy part or all of Yahoo (YHOO). Miller, who runs venture capital fund Velocity Interactive Group with partner Ross Levinsohn, the former president of Fox Interactive Media (NWS), has discussed the idea with Yahoo board members, and believes that a deal in the range of $20 to $22 a share is possible.

WSJ: Mr. Miller has been talking to private equity investors and sovereign wealth funds for months in hopes of raising money for a Yahoo deal, and it is unclear whether the talks have progressed or are just continuing, these people say. Mr. Miller believes he can do a deal that would be worth around $20 to $22 a share to Yahoo shareholders, these people say, which would involve raising about $28 billion to $30 billion to purchase the entire company.

Sources close to Yahoo expressed deep skepticism that Mr. Miller would succeed in lining up investors.

Indeed, given banks’ reluctance to lend money right now, financing a deal of this size would be extremely difficult, even from deep-pocketed sovereign wealth funds. An investment in Yahoo would also be extremely risky in the current advertising market and amid the company’s ongoing search for a new chief executive. Sovereign investors have lost money on many large investments in the past year and may be reluctant to make a bet on a company with Yahoo’s challenges.

Mr. Miller has discussed the idea with some Yahoo board members, these people say, but the matter hasn’t come up for an official board discussion.

It is unclear whether Microsoft (MSFT), which has indicated that it is still open to doing some sort of deal with Yahoo after it abandoned a $47.5 billion proposal last summer, would be involved in any transaction. Miller’s potential involvement with Yahoo has led for a while now to chatter that he was being considered to succeed Jerry Yang. Whether Velocity’s co-founder will succeed, remains to be seen

Shares of Yahoo rose more than 8% on Tuesday.

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