BooHoo for MSFT: Yahoo Will Reject Microsoft's Takeover Offer
Less than a week after Microsoft announced a 44.6 billion offer for Yahoo, The Wall Street Journal is reporting that the offer will be rejected by Yahoo's Board of Directors.
Why?
According to the WSJ, the Yahoo board which has met several times during the past week, believes that the bid undervalues what Yahoo has to offer. In other words, they (Yahoo) wants more $$$. The WSJ also reports that MSFT's first bid doesn't take into account other "risks" Yahoo would have to take by agreeing to the offer.
We will know more on Monday when the Yahoo Board sends a letter to Microsoft explaining their reasons.
So what happens next? Many possibilities. Here are just a few.
1) Microsoft offers more money. The first offer was at $31/share. According to today's WSJ article, Yahoo wants at least $40/share.
2) Another company comes along and makes an offer for at least $40/share. This has always been a possibility even before last Sunday.
3) Although Yahoo has taken "poison pill" precautions, Microsoft could begin a proxy fight to take control of the Yahoo board in a true "hostile" scenario.
From the WSJ:
Yahoo's board appears to be betting that Microsoft doesn't want to "go hostile" and try to acquire the company against the wishes of management and the board. Such a course could cause deep resentment among the rank-and-file engineers whose cooperation is crucial to the company's success.
4) Yahoo remains independent but does some form of an ad partnership deal with Google. Also, potentially outsourcing search to Google or another player. This would also likely mean the elimination of one large crawled web database (Google/Yahoo/Ask/Live.com/Exalead/Gigablast) for searchers. This is also likely the case if Microsoft and Yahoo do come together.
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