Well even though this is a normal takeover situation. The price Yahoo is going to be asking will most likely be above 60 Billion. I think that might be too much gable for MS. I am sure Microsoft made the offer with levy for a much higher demanding offer. The question is how much levy.
Yahoo Board To Reject Microsoft Offer
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Re: Yahoo Board To Reject Microsoft Offer
#12Earlier quoted context omitted.
Yeah thats not exactly possible. I do wonder, however, what this effectively does to Yahoo's stock price.
see for yourself http://finance.google.com/finance?q=yahoo
What this stock price says to me is that investors are betting that this story, even if it's correct, is not the last word, and that Microsoft (or someone) will eventually get them.
Re: Yahoo Board To Reject Microsoft Offer
#13I hope this definitively kills Micro$oft.
Just imagine all those Yahoo services ported to Silverlight. I think it would be very impressive actually.
Re: Yahoo Board To Reject Microsoft Offer
#14From the reason they quoted ("the $31 per share offer massively undervalues Yahoo!"), my guess is that this 'rejection' is just the first play in a dance over the price, which I'm sure Microsoft was prepared for, even if it bid high initially in an attempt to appear the White Knight.
If Yahoo!'s board really did not want to sell, it would have cited lack of benefits to the merger, culture differences, or technology platform differences, which are all real concerns.
Their risk is that if they ask too much, then Microsoft will slink away, which will probably crush their share price for a while. Hopefully some people had options that they could excercise under the recent 40% jump in Yahoo!'s shares, although considering it's decline in the last year, even that seems unlikely.
Re: Yahoo Board To Reject Microsoft Offer
#15"the $31 per share offer "massively undervalues" Yahoo," Now I'm no mathematician, but when microsoft made that offer, I believe their stock closed at 19.10, which I believe is significantly less than $31. The mere offer from microsoft caused their value to jump 50% in a day. Monday might be ugly for YHOO owners.
This is normal in a a takeover situation. The reason being that a company that you control is worth a lot more than a bunch of shares that pay you dividend, but offer you little or no control over the company. The pundits know this and drive up the price, expecting to make a profit when Microsoft buys them out.
Shares offer proportional votes.
Re: Yahoo Board To Reject Microsoft Offer
#16"Massively Undervalues" huh...
Let's see, a stock price of under $20/share previous to the $31/share offer being made. A greater than 50% premium is massively undervaluing the company?
Granted the market is not a perfect indicator of true value of a company. Google was a good example of this when they were valued at around $100/share and then proceeded to quadruple in value over the next 2 years.
However, Yahoo is no Google. They have not been able to effectively compete. I'm surprised Microsoft was willing to offer such a premium for Yahoo in the first place. Maybe I underestimate the synergies of the two companies and/or Microsoft's concern about their online division.
The interesting question to me is what comes next...Does Microsoft: A. Sweeten the offer B. Walk away completely C. Give it a year expecting Yahoo's price to drop significantly before making a subsequent offer?
Unless the Yahoo boardmembers have some plan up their sleeves, I expect some very unhappy shareholders should B or C pan out.
Re: Yahoo Board To Reject Microsoft Offer
#17"the $31 per share offer "massively undervalues" Yahoo," Now I'm no mathematician, but when microsoft made that offer, I believe their stock closed at 19.10, which I believe is significantly less than $31. The mere offer from microsoft caused their value to jump 50% in a day. Monday might be ugly for YHOO owners.
This is normal in a a takeover situation. The reason being that a company that you control is worth a lot more than a bunch of shares that pay you dividend, but offer you little or no control over the company. The pundits know this and drive up the price, expecting to make a profit when Microsoft buys them out.
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Re: Yahoo Board To Reject Microsoft Offer
#18Visual proof that this would be a poor move for microsoft, at least according to investors.
http://finance.google.com/finance?chdnp=1&chdd=1&chd...
Re: Yahoo Board To Reject Microsoft Offer
#19Visual proof that this would be a poor move for microsoft, at least according to investors. http://finance.google.com/finance?chdnp=1&chdd=1&chd...
Doesn't this almost always happen with mergers and acquisitions?
Re: Yahoo Board To Reject Microsoft Offer
#20There are some pretty good comments about the deal over at slashdot.