Microsoft and Yahoo can't agree
Posted
Apr 04 2008, 03:23 PM
by
Kim Peterson
It's either a slow news day or people are starved for developments in the Microsoft-Yahoo saga. How else to explain the attention being given today to an article that says nothing happened in the on-again, off-again acquisition talks between the two companies? And late this afternoon, we get word that Microsoft might be "evaluating" its bid. Oh, brother.
According to the WSJ story, the two sides met, talked and left without resolving differences. Microsoft doesn't want to raise its initial bid (valued now at about $42 billion), and Yahoo won't enter formal negotiations unless more money is on the table. That's about where they were a month ago when the two companies met to chat.
The next date to watch for is April 22, when Yahoo reports its first-quarter earnings. If it has a blow-out quarter, it will certainly gain more leverage in negotiations. If it gives a less noteable performance, it will give up ground. Companies can tweak earnings a million different ways, and I bet Yahoo has done everything it can to produce an impressive quarter.
Both companies saw shares rise less than 1% today: Microsoft's share price closed at $29.14, and Yahoo's share price closed at $28.32.
Update: In the latest round of negotiating through the media, a source told Reuters today that Microsoft is "evaluating" its bid because Yahoo's value might be less than what Microsoft initially offered. What a transparent attempt to pressure Yahoo shareholders. I'm glad it's the weekend.
Here's what others are saying about the situation today:
CNBC's Jim Goldman: "I think Microsoft is on the hook to get a deal done, it doesn't merely want Yahoo, it craves it, and I'd be surprised if Microsoft walks. And Yahoo knows it."
Blogging Stocks: "While it has been proposed before, it is stunning that Microsoft does not walk away from its offer, at least for now. At this point Redmond has absolutely no leverage. The Yahoo! board can wait it out."
Between the Lines: "What I really don’t get is why Microsoft doesn’t just start accumulating shares. There are no other bidders and Yahoo is well below Microsoft’s bid. Enough of this banter. Steve Ballmer needs to start buying some Yahoo shares."
Silicon Alley Insider: "Both positions are understandable, but time is working against both companies. One imagines that this standoff could quickly be ended by the companies' $300 million investment bankers: A quick phone call and a verbal agreement that, if Yahoo comes to the table, Microsoft will likely raise its bid at the 11th hour (as we still expect it will) should suffice."
Disclosures: I don't own shares of any companies mentioned in this post. And while Microsoft owns this blog, Microsoft does not control, censor or otherwise have any editorial influence over what I write.
