RSSThe answer to Microsoft is no: Yahoo holds out for more cash
By Scott M. Fulton, III | Published February 11, 2008, 11:14 AM
Now that Yahoo is apparently in play, and talk among Wall Street Insiders touches on big names such as Google, Amazon, and AOL, Yahoo apparently feels all the talk has elevated its value high enough where it can afford to say no to Microsoft.
After its board of directors met over the weekend to discuss the takeover bid from Microsoft, Yahoo's response this morning is that Microsoft hasn't offered enough. That's not to say it won't accept another bid from Microsoft or perhaps someone else, but it's taking a big gamble that another bid is forthcoming.
"After careful evaluation, the Board believes that Microsoft's proposal substantially undervalues Yahoo," reads this morning's corporate statement, "including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders."
In short, the company is saying Microsoft isn't taking into account how valuable Yahoo's assets truly are, which perceived in terms of future value. Microsoft may very well agree, having indicated on February 1 it wasn't really interested in many of Yahoo's assets, and intends instead to put Yahoo's engineers to work building onto Microsoft's existing platforms and technology assets.
Last week, financial analyst Tripatinder Chowdhry, who has covered Yahoo for over a decade, wrote he believed there was evidence that Amazon may have been planning an amicable takeover, and Microsoft's move was essentially a ploy to pre-empt that pairing.
This morning, with Yahoo having stated it has hired Goldman Sachs, Lehman Brothers, and Moelis & Co. to serve as financial advisors, the London Times is floating what it believes to be evidence that those advisors have already started softening Time Warner on the idea of what the paper calls a "tie-up" between Yahoo and AOL. "Tie-up" is a very fuzzy term that does not suggest an outright takeover, and BetaNews is looking into this story further.
Maybe yahoo just doesn't want Microsoft...?
I do believe they'll regret this one.
Score: 0
|Wow.
...and everyone says MSFT are the greedy ones.
Score: 0
|So you hate capitalism now? Jeez, make up your bipolar brain, son.
Score: 0
|Jump to conclusions much, son?
Read more into a comment than what is actually there much, son?
Reading comprehension not your strong suit, son?
Only you could make that wonderful leap between what I typed and what you wanted to hear. Gotta love how well you do that "filter reality" thing.
Score: 0
|LOL, son :D
Score: 0
|Maybe... just maybe they are hoping that a more likable bidder will come along =)
Being courted by Microsoft has GOT to feel sleezy when you've not only been in competition with them but you also realize that you're giving them a leg up on the competition...
Score: 0
|lol...
I wonder if this company learned it's lesson from it's own history.
Value went up, the 2 execs started spending...valued dropped to less than 10% and they were broke...now they are aok...but I remember a lot of other companies doing this and getting stuck with way less.
Greedy, hehe
Score: 0
|Time for a hostile takeover.
Score: 0
|Expensive! They would need to outbid Directors/shareholders by a LOT. MS already has to borrow.
Yahoo isn't a good buy. They were a good buy a long time ago, before google ate their market.
Score: 0
|Yahoo's board members are fooling themselves if they think they're worth more than the 62% premium Microsoft offered them. They add nothing unique to the picture.
Score: 0
|This was a HUGE mistake on Yahoo's part. They should have taken the money and run. I have a sinking suspicion they will regret this decision in the very near future.
This company will be bought for a FAR lower price in the not too far off future I have a feeling.
Again, Yahoo has no real value any more. They aren't innovating and they aren't breaking new ground in any areas...as a matter of fact, they haven't been a true innovator in many years now. All they can really provide to a buyer is eyeballs, and the number of those that they can provide is shrinking very quickly every day as new competitors that are more aggressive and creative eat into their user base.
Score: 0
|it sounds like that yahoo is / was willing to sell, if the price is / was right.
however, lets all come back down to earth:
yahoo's value is grossly overstated and is supposedly having a hard time with it's finances.
if i had yahoo stock, i would sell it all because it is likely another dot.com balloon time to burst.
and paying more than what it is really worth, would only be inflating that big fat balloon of empty air.
Score: 0
|The article in our local paper stated that Yahoo felt that the offer was too low. I have to wonder what they are thinking that 62% over value is too low.
I think MS will now just wait until Yahoo tanks again - and then pick them up for less than what they're worth.
They maybe delusional because their stock rose on this announcement - but once they see that MS has turned their sights elsewhere - their stock will drop probably lower than it was and then MS will pick it up for cost.
Score: 0
|I'm not disagreeing, but enlighten me--where did that 62% number come from?
Score: 0
|....the article?
While that was ascertained to have been a 62% premium over Yahoo's closing price on January 31, Yahoo's share value had been trading at near $30 since Microsoft announced its bid.
Score: 0
|sukit!
Score: 0
|