Time for Microsoft to make a decision over Yahoo
Microsoft’s bid to take over Yahoo is still ongoing, but with the three week deadline set by Steve Ballmer for a decision from the Yahoo board on a friendly takeover having gone by without comment on Saturday, the gloves are now coming off, and Microsoft will have to decide which way to play it now.
Microsoft offered the Yahoo board $31 a share, but that wasn’t good enough. They then set a three week deadline for the board to accept the deal or else. Steve Ballmer warning:
“If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board.”
Now that three weeks has gone by, and still no word from the Yahoo board of directors, or, for that matter, from Ballmer and Microsoft either. They are likely to be weighing up their options at this moment in time, which according to an in-depth article by Marc Andreessen comes down to five possible scenarios.
1. A hostile takeover – Microsoft launches an all-out attack, probably by approaching the shareholders directly.
2. A higher offer – Microsoft either ups, or otherwise modifies the bid to make it more attractive to the board.
3. Microsoft walks away – Literally, just dumps the offer, and moves on.
4. Yahoo finally accept – Taking the current offer without any change.
5. Another bidder – Someone else walks in and offers the Yahoo board more money.
Marc, and corporate attorneys Michael Sullivan and Ed Deibert think that list is in order of likelihood, with number 1 the most likely to happen at this important stage of proceedings. Number 1 is seen to be by far the most likely, with a 40% chance of occurring.
A deal with Google, which seemed likely at one point, now seems to off the table, or at least all is quiet on that front of late.
I think whatever is going to happen will happen very soon, with Microsoft likely to want to appear strong and not taking any prisoners. I can’t personally see it going any other way than hostile, but stranger things have happened in the past.
We’ll update as soon as anything breaks.
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