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| The Beast that blinked |
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| Sunday, 04 May 2008 | |
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Ballmer the charmer packs his bags and says goodbye to the predatory circus. And now Yahoo! is in serious sh1t...
“Clearly a deal is not to be.” Thus spake Zarathustra, known also as Steve Ballmer (the charmer), CEO of Microsoft, in calling off his US$40bn+ pursuit of search tiddler Yahoo! yesterday. “I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.” Tablets of stone. Sunday being a day of rest, we’ll leave it to the protagonists in the Microsoft-Yahoo! takeover saga to do the talking after yesterday’s surprise exit by Microsoft, coming a week after the final deadline for Microsoft’s offer had passed. Yet, these statements do reveal that the Beast of Redmond had in the interim gone almost halfway towards meeting the Sugarplum Fairy of Sunnyvale’s eventual asking price. So it’s final offer was not so final, and this retreat might turn out to be equally negotiable. “Despite our best efforts, including raising our bid by roughly $5billion, Yahoo! has not moved toward accepting our offer. After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal”, said Ballmer yesterday. Yahoo! Chairman Roy Bostock retorted that “from the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft's offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view.” Jerry Yang, co-founder and CEO of Yahoo! added, "I am incredibly proud of the way our team has come together over the last three months. This process has underscored our unique and valuable strategic position. With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users." People who live in glass houses should not come up with such stone-edged hostages to fortune. Once Yahoo!’s share price drops back to pre-bid levels (if it doesn’t, that will only serve to confirm that the company is still ‘in play’), that potential may start to look limited. Maximising it may prove impossible unless another takeover comes knocking. In an open letter to Yahoo!’s Yang yesterday, Steve Ballmer (the charmer) said that “I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.” All but admitting that Microsoft had blinked, he writes, “in our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5billion or more, or at least another $4 per share above our $33.00 offer.” Damningly with a plague-like intensity, for both houses, Ballmer cites the Google circumvention as a major stalling point. “We regard with particular concern your apparent planning to respond to a ‘hostile’ bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today.” Charmingly (as befits him) he notes that “by failing to reach an agreement with us, you and your stockholders have left significant value on the table.” Ballmer, meanwhile, contemplates leaving significant egg on the face. His own. The Mk1 GerBill would not only have turned the other cheek, he’d have filled it too. Jim Chalmers |
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