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Even though Microsoft (NASDAQ: MSFT) revoked its buyout offer, Yahoo!'s (NASDAQ: YHOO) shares have been resilient. Actually, they are up 5% today.
Then again, the Yahoo! shareholder base is full of arbs, hedge funds and activists who want to force the company to get some type of transaction done.
Funny enough, the CEO of Yahoo!, Jerry Yang, is indicating that he's still interested in a hookup. But, of course, Microsoft seems to be pretty cool on things. After all, the firm was bidding against itself.
However, the fact remains that Yahoo!'s shareholders are perturbed. Take Gordon Crawford, who manages Capital Research Global Investors and controls roughly 16% of Yahoo!'s shares. He said he's "extremely angry at Jerry Yang" and wonders what the board was thinking. Basically, Crawford would have been happy with $34 per share.
Despite all the pressure, I still think a deal won't get done with Microsoft. Instead, I think the Redmond giant will use its billions on other targets, such as AOL. The result, unfortunately, will be further pressure – over time – on the stock price of Yahoo!
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
5-06-2008 @ 4:47PM
NewsVisual said...
In what could be a harbinger of a shareholder revolt against its Board of Directors, investors went public with their dismay over the failure of Yahoo! Inc to negotiate successfully a deal with Microsoft Corp. The Wall Street Journal reported on the frustration of some high-profile Yahoo shareholders on Tuesday: "'I'm extremely disappointed in Jerry Yang,' said Gordon Crawford, a portfolio manager at Capital Research Global Investors, which owns over 6% of Yahoo's shares. 'I think he overplayed a weak hand. And I'm even more disappointed in the independent directors who were not responsive to the needs of independent shareholders,'" The Journal article reported. Many of the shareholders believe that Yang was being unrealistic by demanding that Microsoft offer $37 per share as the price for entering into negotiations. "Some of Yahoo's major shareholders had by late last week signaled to Yahoo that they were open to a deal around $33 or $34 per share, according to people familiar with the matter," The Journal article said. In response to these shareholder complaints, Yahoo Chairman Roy J. Bostock told The Journal that Yahoo’s Board of Directors made the right determination and its members stand by their decision.