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Bigger bucks or back off, Beast! |
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Monday, 11 February 2008 |
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Yahoo! tells Microsoft to think again (in other words, to find more money) in its takeover bid.
Search company Yahoo! has today rejected a US$44bn takeover approach from the Beast of Redmond on the grounds that it “substantially undervalues” the firm. Despite efforts by rivals Google to entice others to bid for Yahoo! or even to perform some sort of tie-up itself with Yahoo!, the company looks friendless: as such, today’s rejection is widely seen as a ploy to force Microsoft’s bid above the current US$31 per share.
Yahoo!’s share price was just under US$30 in pre-trading this morning. Reports suggest that Yahoo! is holding out for up to US$40 per share, valuing it at levels not seen since late 2005.
In a statement, Yahoo! said: “After careful evaluation, the Board believes that Microsoft's proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.”
Given that Google is unlikely to get any counter-ploy involving Yahoo! past the competition regulators, one imagines that a protracted takeover duel between Yahoo! and the Beast is next-best option.
Jim Chalmers
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