Yahoo! has now officially rejected Microsoft’s hostile takeover bid of $44.6 billion, so where does the company go from here? There is speculation today that the once proposed merger between Yahoo! and AOL could be back on the cards.
Yahoo! Inc. has issued a press release today rejecting the Microsoft bid, and explaining why the Board of Directors felt that was the right thing to do. They have “unanimously concluded that the proposal is not in the best interests of Yahoo! and our stockholders.”
As everything does these days, this all comes down to money, and more specifically, the value of the company being targeted. While Microsoft has offered Yahoo! shareholders $31 per share, the board think the company is worth closer to $40 or more per share, and won’t start taking any offer seriously until it reaches that level.
A source close to Yahoo! has told The Times:
“All they [Microsoft] are trying to do is pick off the company on the cheap. They’re trying to steal it. And the board is not going to let that happen. They have gone for a valuation that reflects the five-year low of the stock.”
“It would have to be in the 40s to start talking, and we would have to get over regulatory issues. It would have to be an offer that would give Jerry Yang [co-founder of Yahoo!] something to stand on a podium and smile about.”
There are other possibilities to Microsoft though, with Google said to be interested in a partnership with Yahoo!, although this looks like being more a case of Google trying to exert its power in an attempt at stopping a competitor expanding.
The Times are now claiming that Yahoo! could be looking to start merger talks with AOL again, despite the companies failing to agree terms over price when they last discussed the plan.
Yahoo! and its team of advisers are clearly looking for a way out, and aren’t going to roll over an die in spite of Microsoft’s bold offer. Whether Google or AOL are the people it turns to, it looks like Microsoft have only two options left to stand any chance of taking the company over: Put up or shut up.