Microsoft close to making hostile bid for Yahoo!
Saturday, 03 May 2008, 20:12 IST
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New York: Microsoft was expected to go for a hostile bid to acquire Yahoo!, with an announcement likely Friday, the Wall Street Journal has reported. But the paper cautioned that the situation was fluid as discussions continued at Microsoft. Earlier Thursday, Microsoft chief executive Steve Ballmer declined to indicate the software giant's decision or when the company would announce its decision. Price will be a key factor if Microsoft does take a hostile approach to Yahoo!, for which it made an unsolicited offer in January. Microsoft's original cash-and-stock offer, which Yahoo! has repeatedly said is inadequate, was valued at $29.48 a share as of Thursday. Microsoft this week indicated a willingness to raise its bid to as much as $33 per Yahoo! share, but major shareholders of the internet company want a price in the range of $35 to $37 a share, the Journal said. Going hostile would mean that Microsoft would have to put forward a price acceptable to shareholders holding the majority of Yahoo! shares. It would also be a drawn-out process that would risk that many key Yahoo! employees would leave. Then, its board would have to be removed. A vote on the directors occurs annually at Yahoo!'s shareholder meeting, for which it hasn't announced a date but is expected to hold by July. Ballmer said Thursday that he was confident that his company can build a competitive online-advertising business without buying Yahoo! At the same time, he outlined why he thought Microsoft could benefit from buying Yahoo! He said Yahoo! has strong technology but not the "scale" - such as numbers of customers and advertisers - that it needs. On alternative acquisitions to Yahoo!, Ballmer said there were very few internet companies that have the kind of size Microsoft needs to expand its business faster. For its part, Yahoo! is awaiting Microsoft's decision, as it continues to pursue alternative deals with Google and Time Warner's AOL Internet unit, said the Journal.
Source: IANS
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