Yahoo to Microsoft: No, Thank You


"They tried to make me go to Redmond, I said, No! No! No!"


The WSJ is reporting that the Yahoo Board of Directors plans to reject Microsoft unsolicited $44.6 billion offer:

"After a series of meetings over the past week, Yahoo’s board determined that the $31 per share offer "massively undervalues" Yahoo, the person said. It also doesn’t account for the risks Yahoo would be taking by entering into an agreement that might be overturned by regulators. The board plans to send a letter to Microsoft Monday, spelling out its position.

Yahoo’s board believes that Microsoft’s is trying to take advantage of the recent weakness in the company’s share price to "steal" the company. The decision to reject the offer signals that Yahoo’s board is digging in its heels for what could be a long takeover battle. The company is unlikely to consider any offer below $40 per share, the person said…

Yahoo has taken "poison pill" provisions to prevent an unwanted takeover. Microsoft would likely have to oust the board in order to overturn them."

And this isn’t even the news I was referring to yesterday . . .


Yahoo Board to Reject Microsoft Bid
WSJ, February 9, 2008 5:20 p.m.

What's been said:

Discussions found on the web:
  1. Jonathan commented on Feb 9

    If they want $40 a share, Microsoft will hand it to them in no time.

  2. bt commented on Feb 9

    A little reading around the web I understand a company cannot outright reject a takeover offer for reasons other than “undervaluation.” If they have other reasons not to be absorbed, we get a hint of that when we hear their real price. If that price is higher than what it is, we know they are not interested in being taken over.

    Microsoft is already offering way too much for Hoo. A 60% premium for a company that was already overvalued and with sagging earnings and marketshare is too much premium. I hope this deal doesn’t go through.

  3. bt commented on Feb 9

    Jonathan, I’m not so sure. Microsoft has to show real value in the deal to justify paying a 100% premium (remember Yahoo was trading at 19 before the offer). Microsoft shareholders (I’m one) have already suffered enough in marketcap loss.

  4. UrbanDigs commented on Feb 9

    hmmm, where does YHOO open Monday?

  5. sysin3 commented on Feb 9

    YHOO dost think too much of themselves.

    I value their lousy interface and content around 5, on a good day.

  6. bt commented on Feb 9

    It is hard to make an informed guess before we know the contents of the letter Yahoo is planning to send Microsoft. What is the tone of the letter? Is it “screw you, we are fine on our own” OR “yeah, ok, let’s see how badly you want us”. If it is the former, the market will punish Yahoo for not capitalizing on the offer but also because this is sure to stir dissension amongst insiders/big shareholders. If it is the latter, and if there are indications that Microsoft is willing to up the offer, Yahoo will rise.

    I think either way Google is going to come out ahead of this. If Microsoft pays anymore than the already absurdly high offer, it shows how desperate they are as well as show the market that whatever Google is doing is really great stuff with lot of future potential. If Microsoft pursues an aggressive overtake, that is not going to be good for the final merger. If Microsoft gives up, it has already shown that it has a weak hand and the failed takeover leaves it searching for a new strategy (same for Yahoo).

    Google, meanwhile, continues to execute and pursue marketshare and new initiatives aggressively and its reputation as a market leader will go up a notch or two higher on the already elevated scale.

  7. BKinDaHouse commented on Feb 9

    Barry, i think the Amy Winehouse reference went right over most folks heads, but its spot on.

    In the song, Amy is a junkie. The people around her want her to go to rehab as she is in a downward spiral. Amy does not see it that way at all. Amy is in denial as most addicts are. She does not feel that she needs rehab. She latches on to the illusion that her “daddy”(her man,)thinks she is just fine. She just wants to hang out with her man,(“daddy”)and do more drugs.

    YHOO is very much like Amy Winehouse, disillusioned and in denial.

  8. The Financial Philosopher commented on Feb 9


    This is off topic: I imagine you do not look at any personal finance blogs but the blog, Get Rich Slowly, has this classic film lesson on “Credit” from YouTube that looks to be from the 1950’s.

    You absolutely must check it out! It really draws a stark contrast and a bit of irony to the “credit crunch” and financial crisis of today…

    Here’s the URL to the blog piece:


  9. zero529 commented on Feb 9

    Google especially wins if Yahoo gives MS the bird, then scraps their ailing Yahoo search division and replaces it with a contract to goog.

  10. esb commented on Feb 9

    Be very, very, very cautious in your long MSFT positions early next week because the instant Ballmer goes up to 35-40 you get nailed with another leg down.

    At 40 the amount of overpayment triples (IMHO).

  11. Max commented on Feb 10

    Yahoo either goes to Microsoft or it just goes away.

    Meanwhile, the board of yahoo does everything they can to save their phony baloney jobs.

  12. George Tsiolis – AGORACOM commented on Feb 10

    Barry (OT). It was great meeting you at Money:Tech. Fire me off that e-mail message when you can about managing comments.


  13. JMH commented on Feb 10

    Microsoft really has only one problem I can identify, but it is a big one: The CEO. How many billions of dollars of equity has Steve Ballmer obliterated during his tenure as CEO?

    Much as Apple was almost destroyed by subpar CEOs, but resurrected by a good one, it seems to me that Microsoft could recover once a good CEO is found. If the Yahoo deal blows up, maybe institutional investors will finally demand his replacement.

  14. Paul Jones commented on Feb 10

    JMH is onto something;

    Its pre-Ballmer market share aside; what has MSFT done under Ballmer that has provided positive value to customers? XBox360? Halo?

    Vista is a negative product, as in it siphons value from you, at a price.

    Their remaining software suite is bloat-ware that adds little to no real value with each expensive iteration.

    Many said Apple would go away when MSFT had much more market share than Google does today. I would wager that it is Google who is bound to regress towards the mean as the Next Big Thing comes out, whatever it is.

  15. DH commented on Feb 10

    What no one is discussing is the JUSTICE Department. Whether this deal goes thru or not it will take over a year for the FEDS to approve/disapprove – just look at the Sirrus – XM situation, which is absurd the amount of time that deal is taking to reach a decision. While the FEDS are reviewing, GOOG continues to advance at the expense of any MSFT/YHOO combo. Couldn’t be more pleasing to GOOG to see MSFT tied-up in court.

  16. speedballerbaby commented on Feb 10

    yahoo looking to aol time warner as a white knight. its more than just talk.

  17. Eclectic commented on Feb 10


    Since you’re cross-link sharing with SAI, I don’t suppose you’d mind me giving them an i-n-s-i-d-e-r hint:

    If you motor truckers can’t figure out what’s wrong with your comment board, how TF do you think you can figure out the Softhoo game?

  18. michael schumacher commented on Feb 11

    In short, the street figured out what the company was worth……about 19 a share.

    How anyone can rationalize over paying for something that has been on life-support for two years can only come from the bowels of Mr. Softy.

    Let them have it…..Softy Man will get zero cooperation from anyone left at Yahoo. The only ones that win will be the BOD and Execs. that still have stock. As far as the two companies together?? it’s just a bigger Titanic with a fresh coat of paint.


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