
Investment fund Mithras Capital is proposing that MiIncrosoft would unload Yahoo's Asian assets and non-search businesses, extract $3bn (£1.8bn) worth of savings and receive $2.8(£1.6bn) of tax benefits, meaning the software giant would pay $10.3bn (£6.1bn) for Yahoo's search business.
Mithras Capital, which owns roughly 0.14% of Yahoo, said in a statement that its proposal allows Microsoft to buy Yahoo's search business for $2bn (£1.2bn) less than it offered in July.
Following months of protracted talks between the two companies, Microsoft pulled out of negotiations to buy its search business.
Microsoft and Yahoo declined to comment, according to reports.
Meanwhile, Yahoo has delayed the start of a search advertising partnership with Google while it sorts out regulatory concerns about the deal.