Microsoft increases pressure on Yahoo
In the takeover gamble surrounding Yahoo by Microsoft, both sides are still unyielding. Yahoo again rejected Microsoft’s takeover bid for around 42 billion dollars on the grounds that the bid was too low. The Redmond-based Yahoo had already set an ultimatum for April 26 at the weekend. If the transaction does not come about “peacefully” by this date, the software giant says it will not wait any longer and carry out a “hostile” takeover – and at a much lower purchase price. Insiders see Yahoo’s price drop of 2.2 percent to $27.75 as a direct investor reaction to the rejection of the ultimatum.
However, Yahoo co-founder Jerry Yang remains undeterred. In a letter to Microsoft CEO Steve Ballmer, Yang said they still believe the current offering is too low and “not in the best interest of Yahoo and its shareholders.” Microsoft, on the other hand, claims that Yahoo was not generally averse to being taken over by Microsoft as long as the merger was in the interests of Yahoo shareholders. In an open letter to Ballmer, however, the Yahoo board criticized Ballmer’s letter in an unusually sharp manner. “We view your threat of a hostile takeover as counterproductive and a departure from your objective of a friendly transaction,” Yahoo executives said. Analysts expect that if Yahoo does not give in, Microsoft will turn directly to the shareholders to elect a new management team.
As of January 31, Microsoft had offered the Internet portal operator $44.6 billion in the form of a split cash and stock transfer offer. In the meantime, however, the takeover bid has fallen below $41 billion due to a decline in Microsoft shares and represents a premium loss of over 60 percent compared to the end of January. Even if the offer is rejected, Yahoo continues to show its support Openly seek alternatives that maximize shareholder value. “To be clear, this includes a transaction with Microsoft provided it reflects Yahoo’s full value,” Yang and Yahoo chiarman Roy Bostock underscored their position to Ballmer. The ultimatum for the negotiation climate is also “counterproductive”, the BusinessWeek quotes the Yahoo manager.
As recently as Wednesday, RZB analyst Christian Hinterwallner expressly warned of unnecessary sharpness on the part of Microsoft. In order to further increase the pressure on Yahoo, Microsoft has recently emphasized that Yahoo’s rating has increasingly deteriorated as a result of the financial market crisis. In addition, there has recently been some indication that the Yahoo search engine is also being used less frequently than it used to. pte