According to the Wall Street Journal [a paid publication], it looks like the Yahoo! (NASDAQ: YHOO) board will reject Microsoft's $31 buyout offer. Basically, the company wants at least $40 (hey, why not?).
So, now the ball's in Microsoft's (NASDAQ: MSFT) court. What to do? There are several options.
Of course, Microsoft can up its bid. But why? After all, who can really compete against Microsoft? In other words, why should Microsoft bid against itself?
The #2 option: go hostile. This means filing a tender offer and waging proxy fight. In other words, shareholders will be able to make up their own minds. And, given that the Yahoo! shareholder base has changed significantly (that is, with lots of money-grubbing hedge funds), I think there will be lots of pressure to get a deal done.
True, the hostile approach may be scary to Yahoo! employees. But, I have to assume they also realize that Microsoft is going to gut headcount anyway.
In fact, I think a hostile approach can actually get to a negotiation -- and perhaps a small boost in the offer.
Something else: speed is important. With the election year, it's not easy to predict who will be in the White House -- and how a new regulatory regime may impact the antitrust implications of a Microsoft-Yahoo! combo.
Tom Taulli is the author of various books, including The Complete M&A Handbook
Entrepreneur's Journal: Putting together a solid sales contract
The week in preview: Earnings from Walmart, Macy's, and other retailers
Six top trades for the rest of 2009
Reader Comments (Page 1 of 1)
2-11-2008 @ 1:05AM
Joyce L Williams said...
would like to add that as a prime investor in both Yahoo! and Microsoft during this suprime benefite
in this country, i feel that as a CEO, Microsoft variably well accept the request of the increase on the offer with coprorate tax considerations as an
large conglomerate opportunity to acknowledge
continuity and prime resergence in this M&A and
look to solid reorganization and lucrative stipends.
2-11-2008 @ 1:06AM
Joyce L Williams said...
at this suprime level on the economic downstream in suprime captivity, we are at a milestone of indebtness, of a subgraphical break-in on the economy and subprime equity and generalized
economic superbly acknowledged by the recent
aggressive stimulus package
2-11-2008 @ 6:56AM
al coholic said...
Joyce,
Mark Twain is rolling over in his grave.
2-11-2008 @ 8:36AM
Michael Schneider said...
As Mark Twai rolls, Microsoft was reportedly set to offer $35 a share for Yahoo and many commentators expect it to increase its offer to get the deal done. Some are saying the combined company will not be as strong as many think however-- see new item on this merger in the Internet Stock Updates section (left side, green label) at http://www.Barrelomoney.com.
4-01-2008 @ 10:40PM
Devon said...
I agree that microsoft will do anything to merge w/ yahoo in order to compete w/ google, the reason microsoft doesnt "dish out the money" is because they dont want to. Google is rising and microsoft is dropping. i believe microsoft is a monopoly, they offer programs that rely on the downloading of other programs created by themselves. If they werent a monopoly, they wouldnt attempt to buy out all other competitors so people would have to buy their programs thus doubling the download/income of all customers. down w/ microsoft!