The Canada Pension Plan Investment Board is working with partners to put together a bid to buy Yahoo Inc., the Wall Street Journal reported Thursday.

CPP is partnering with Microsoft and private equity fund Silver Lake partners in an attempt to buy the search engine company, the paper reported.

A spokesperson for the board that manages the money for Canada's national pension plan declined to comment to CBC News on the report. "It is CPPIB policy not to comment on rumour and speculation in the marketplace," the spokesperson said.

CPPIB had $153.2 billion in assets under management at the end of June.

Yahoo shares gained more than two per cent to trade above $16 per share on the Nasdaq on Thursday. The company is currently worth about $20 billion US.

Microsoft would put up billions more than the other partners and as such have a larger interest under the structure of the Yahoo deal, the Journal said. Microsoft tried to buy Yahoo in 2007, when the latter company was worth almost $50 billion US, but was rebuffed.

CPP and Silver Lake have worked together before, taking an early interest in online communications firm Skype Inc., the company Microsoft bought earlier this year for $8.5 billion.

Roughly 700 million people visit Yahoo websites every month. But the company has seen its market share of online search slowly erode over the years. Yahoo company abruptly fired CEO Carol Bartz  last month despite cost-cutting measures imposed by Bartz that helped boost Yahoo's earnings after stripping out one-time gains.

After subtracting ad commissions, Yahoo's third-quarter revenue stood at $1.07 billion — a five per cent drop from the same time last year.