Bets against Microsoft-Yahoo deal may be waning
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Skepticism about Microsoft Corp's   prospects of buying Yahoo Inc  may be waning,  as short sellers appear to have backed away in the last few  days from bets against Yahoo's stock rising.
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Many Yahoo shareholders are waiting for a higher bid than that offered by Microsoft, but analysts say it is increasingly unlikely.
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A little more than a week after Yahoo received an unsolicited bid from Microsoft, the company has reportedly entered talks about a partnership with Rupert Murdoch's News Corp. Analysts say the matchup would do little to resolve Yahoo's woes.
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Yahooâs rebuff of the $44.6 billion takeover bid raises the stakes in a battle involving two of the worldâs most prominent technology companies.
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School kids arenât the only ones returning from vacation. Dog-eared speculation about a potential deal between Yahoo and Microsoft is back as well. Rumors flew about a possible transaction between the two companies in May, after various reports suggested that Microsoft was considering a joint venture with Yahoo, an acquisition of Yahooâs search business or an [...].
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Skeptical investors are trading Yahoo Inc  shares at a 6.5 percent discount to Microsoft Corp's  unofficial offer price, but some Wall Streeters expect the software giant to raise its bid.
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In turning down the $44.6 billion takeover offer, Yahoo is betting on a sweeter bid from Microsoft or finding another way to make its stockholders happy.
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Most of the talk about Microsoft's hostile offer for Yahoo has focused on whether the deal could tip the scales in the battle for Internet dominance. Today, I'd like to steer the conversation to something a little more basic that almost everyone has overlooked: the numbers.
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Microsoft Corp  will  authorize a proxy battle for Yahoo Inc  this week to  convince the Web company's shareholders to agree on a takeover  deal that the Yahoo board so far has rejected, the New York  Times' Dealbook blog said on Tuesday.
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Unable to topple Google Inc. on its own, Microsoft Corp. is trying to force crippled rival Yahoo Inc. into a shotgun marriage, with a wager worth nearly $42 billion that the two companies together will have a better chance of tackling the Internet search leader.
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Yahoo Inc  said it may take  "quite a bit of time" to weigh its strategic options, including  keeping the company independent, following Microsoft Corp's   $45 billion offer to buy the company.
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Most of Yahoo Inc's  top  institutional shareholders may be more interested in making  sure Microsoft Corp  does not overpay for the Web  pioneer, because they have more money invested in the bigger  software maker, a research report said on Friday.
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Thanks to a decline in Microsoft shares, the stock portion of the company's offer has dropped. That means that as of now Microsoft is offering less than it was four days ago. To match its original $31 per share offer, Microsoft would have to boost the exc
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SEATTLE/SAN FRANCISCO  - Yahoo Inc   rejected Microsoft Corp's  unsolicited $41.6 billion  takeover offer as too low on Monday, forcing the software maker  either to sweeten the bid or adopt a hostile approach to clinch  a deal.
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Microsoft&#39;s offer Friday to buy Yahoo&#160;for $44.6 billion in cash and shares put a turbulent end to a heavy earnings week in which forecasts from Internet leaders worried IT investors.
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Microsoft plans to intensify its pursuit of Yahoo this week when it authorizes a proxy fight to oust Yahoo&#39;s board, meaning the 19-day old acquisition attempt will soon turn a darker shade of ugly, according to The New York Times.The proxy fight will cost Microsoft between $20 million and $30 million, much less than having to significantly up its offer for Yahoo, The Times reported Tuesday morning, quoting anonymous sources.The aggressive move would be consistent with Microsoft&#39;s statements hinting that it&#39;s willing to acquire Yahoo via hostile means if necessary.&#160;Yahoo&#39;s board rejected unanimously Microsoft&#39;s offer, calling it too low.Yahoo declined to comment about The Times&#39; article. Microsoft didn&#39;t immediately reply to requests for comment.On Feb. 1, Microsoft offered to pay $31 per share for half of Yahoo&#39;s outstanding shares in cash -- about $22.3 billion -- and 0.9509 of a Microsoft share for the other half. Microsoft&#39;s half-cash/half-stock offer to Yahoo was valued at about $44.6 billion at the time it was made; Yahoo&#39;s share price was $19.18 at the time.However, the bid&#39;s value has dropped to about $41 billion as the price of Microsoft&#39;s stock has fallen from $32.60 at the time the offer was made. It was trading at $28.77 on Tuesday morning. At the same time, Yahoo&#39;s stock has surged, erasing the bid&#39;s original premium. It was trading at $29.32 on Tuesday morning.In the proxy fight, Microsoft would hire a proxy solicitor to urge Yahoo investors to kick out board directors, The Times reported, adding that all Yahoo directors are up for nomination this year.After investing heavily in recent years in its Internet business and failing to achieve its desired goals, Microsoft is now convinced that it must acquire Yahoo in order to compete against common rival Google, especially in search advertising, the largest online advertising market pie, and one that Google dominates.As of the end of 2007&#39;s third quarter, Google had almost 25 percent of the U.S. Internet advertising market, up from almost 21 percent in 2006&#39;s third quarter, according to IDC. Meanwhile, Yahoo&#39;s share during this period dropped to 11.3 percent from 12.3 percent, while Microsoft&#39;s declined to 5.2 percent from 5.8 percent, according to IDC.In search usage, Google held a commanding 62.4 percent of queries worldwide, followed by Yahoo in a very distant second place with 12.8 percent, according to comScore. Microsoft ranked fourth with 2.9 percent, after Baidu (5.2 percent).Unquestionably, Yahoo would be a major win for Microsoft in the display ad market. In November, Yahoo ranked first in the U.S. in display ad impressions with a 19 percent share, while Microsoft came in third with 6.7 percent, after News Corp.&#39;s Fox Interactive (16.3 percent), according to comScore. Google took seventh place with 1 percent.However, skeptics question whether acquiring Yahoo will yield the expected benefits, considering the complexity of integrating the two businesses, cultures and technology platforms and the fact that Yahoo has had severe internal problems that have stumped its most seasoned executives. In addition, some aren&#39;t sure that a unified Microsoft/Yahoo will have a better chance to compete against Google.Yahoo co-founder and CEO Jerry Yang, who is also on the board of directors, has been urgently looking for and considering alternatives to a Microsoft acquisition soon after Ballmer and company made their bid.Reports -- all attributed to anonymous sources in various media outlets -- have emerged in the past two weeks that Yang has held conversations with Google, AOL and News Corp., exploring various deals that would allow him to reject Microsoft&#39;s offer.The key is that the shareholder value created by a competing deal would have to at least match the value of Microsoft&#39;s deal. Otherwise, Yahoo would make itself liable to shareholder lawsuits that alleged the board had failed to perform its fiduciary duty.So far, as experts have analyzed the potential value to Yahoo of outsourcing its search advertising to Google, merging with AOL or selling a 20 percent stake to News Corp. in exchange for MySpace, the consensus has been that none of those scenarios comes close to matching Microsoft&#39;s offer.
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With merger and acquisition fever said to be waning, which deals will be the ones to work out?