And the saga continues… yesterday we reported that Yahoo officially turned down Microsoft’s offer to acquire them for $44.6 billion dollars. Yahoo said that the offer undervalued them, and so they weren’t interested (typical corporate response for a first offer). Microsoft has now responded to Yahoo and the story gets more and more interesting. The first few lines of Microsoft’s press release reads:
It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.
We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.
Around the web, I’ve seen a few people mention that this was going to be a “hostile takeover” and now I can see why. Microsoft has set their sights on Yahoo and they are not going to be looking away any time soon. If there was any question on whether or not Microsoft was going to turn to the shareholders, there shouldn’t be any longer. The last line of the press release states:
The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.
Watch out Yahoo shareholders! Microsoft is coming after you and will probably do whatever they can until you realize the “inherent value” in their proposal. Is Yahoo fighting a battle that they can’t win? Perhaps anti-trust issues will pop-up and “save” them from Microsoft, but then what will happen to their stock? Before Microsoft announced that they were interested in Yahoo, their stock was trading at nearly 52-week lows. Post-announcement, their stock shot-up. It’s clear that Yahoo needs and probably wants to do something drastic and there are options out there. I just don’t think at this point they’re confident on which direction to take. If you were Yahoo, what would you do?
You need to make a correction to your article. It is NOT the Yahoo! shareholders that turned down the Microsoft offer, it is the Yahoo! board. A number of Yahoo! major shareholders are on record that this deal needs to be done. The board, either through vanity, protecting their positions, or playing a game of chicken, are making it difficult.
Microsoft does not have to convince Yahoo! of anything, or attack shareholders like you imply. Yahoo! shareholders will hold the decision if this is the best return on their investment, and product loyalty or silly MS bashing will not make any difference at all.
Yahoo shareholders want this deal to go through I believe. I owned Yahoo stock for the past 3 years and there is no way YHOO could be valued any higher than $31 a share with its terrible management that it has had.
It may be a terrible acquisition for Microsoft, but Yahoo shareholders just want the most value.
@Ashley:
If I were a shareholder, I would take a serious look at the option of teaming up with Google in the search and advertising business. This alternative will immediately boost Yahoo’s cash flow about twenty five per cent. Meanwhile, I would do everything I could to focus on those core competencies that has made Yahoo great.
Microsoft is a 20th century corporation, while Yahoo and Google are 21st century companies. There is no way Microsoft can effectively lead Yahoo in the Internet domain. They just don’t know how. Their world has been and still is—the desktop world.
Regards,
Omar.-
Ya, despite what people think Google and Yahoo never really did anything to tick each other off, there were somewhat friendly to each other. Now Microsoft and Google on the other hand….
I think you must have mistunderstood what I said because I wasn’t trying to imply that the shareholders turned down the Microsoft offer. What I was saying was that Microsoft will now be moving on to the shareholders because the Board of Directors has turned them down.