MicroHOO! Wednesday, February 20, 2008
Posted by ei-forum in US Traded Stocks.trackback
Despite Microsoft offering Yahoo! a 62% premium with their January 31st offer at 31 USD per share, it looks like Jerry Yang will not go without a fight. Yahoo! rejected the takeover bid on the grounds that it “substantially undervalues” the company and Microsoft has responded (even through Gates) by maintaining that the offer is fair, they will not start haggling and that they are willing to embarking on a proxy battle.
The following weeks will no doubt be interesting as this plays out and despite the outcome with Microsoft, we find it hard to believe that Yahoo! will stay independent. It seems that Mr. Yang is prepared to go to war but is this because he is really defending Yahoo! interests or his own ego? A full blown fight would be harmful to both companies and leave deep scars that would have to be healed during a difficult merger/integration process and this cannot be be good for anyone who will still be working with the new entity.
The main issue is that current Yahoo! management has failed to deliver value to their shareholders and by turning down this deal, they are simply compounding this. Furthermore, many powerful shareholders and board member hold stakes in both companies and would find it very difficult to explain no being able to realize this +60% gain on their Yahoo! stake.
Maybe Mr. Yang should try and discuss a more ‘reasonable’ settlement instead of sticking to his min. 40USD price…
Maybe Microsoft should just go ahead and sweeten the offer….
Whatever the outcome, we hope that the true winners will be the shareholders.
Stay tuned for more action…..
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It’s my sorry duty to report that both ballmer and yang are both saying to the shareholders, “let them eat cake”.