Ballmer sets Saturday deadline to accept or drop deal
Last modified on Friday, 25 April 2008 01:46
Microsoft Corporation’s CEO, Steve Ballmer, stated today that Microsoft is prepared to walk away from its bid to the Board of Directors of Yahoo Inc. if Microsoft and Yahoo cannot come to an agreement on a purchase price. Ballmer notified the Board of Yahoo in a letter and stated that the deadline to conclude the deal is this Saturday. Microsoft previously offered a $43.6 billion bid for the shares of Yahoo at the end of January.
If the deadline comes and goes, Microsoft says it will attempt to take its bid directly to Yahoo’s shareholders, which it warned may result in a lower overall price if the shareholders accept it. Yahoo’s Board has balked at the $43.6 billion bid that is in the form of a cash and stock type offer, saying that the bid “significantly undervalues” Yahoo.
Industry analysts have stated that Microsoft is not likely to walk away, due to the Internet advertising strength of Yahoo. However, the longer the two sides wrangle the more the value of Microsoft’s offer for the shares seems to fall. Microsoft’s stock has dropped in value and the company would have to increase its per share bid price to honor the full value of its original bid price.
Microsoft has been pursuing the Yahoo deal despite numerous obstacles it has encountered, as it sees Yahoo as a viable means of competing with its rival, Google. The combination of Microsoft and Yahoo would be a huge boon to Microsoft’s Internet and advertising, as Yahoo and Microsoft currently rank second and third in Web search popularity. Google is ranked number one.