Last modified on Monday, 05 May 2008 07:44
Microsoft has given up its effort to acquire Yahoo, it reported. Microsoft increased its $31.00 per share bid in cash and stock to $33.00 per share. However, Yahoo rejected that new bid, apparently indicating it was willing to hold out for $37.00 per share, which is apparently $5 billion more than Microsoft was willing to offer. Microsoft’s CEO, Steve Ballmer, indicated in a letter that the offer has been withdrawn, as has a direct offer to Yahoo shareholders.
Ballmer stated in the letter to Yahoo, “This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft….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.”
The outcome was nothing but positive for Yahoo, at least in the short term. Microsoft’s offer from three months ago to the $33.00 per share increase sent Yahoo’s stock up from its original per share price of $19.18 to $28.67 on Friday, May 2nd.