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BUD board does the right thing, Yahoo's doesn't

Posted Jul 14 2008, 08:10 AM by Douglas McIntyre
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The board at Anheuser-Busch did the right thing. It got a offer well above market to sell the company. It fought for more money. When it got the better price. It sold.

BUD stock has been stuck in the mid-$50s for some time. The beer business is OK, but it is hardly a growth industry. With a global recession underway, it is hard to see why InBev wants to buy Bud at such a high price, but, to seal the deal, it upped its offer to $70 a share. Anheuser-Busch was not likely to see its stock at that level for a long, long time. It simply did not have a way to enhance the attractiveness of its business.

Yahoo's situation is not dissimilar. Much of its growth is behind it. The company's last few quarters have been disappointing. It is now a distant No.2 in the search engine market. Much of its revenue comes from the display advertising sector. That market is a modest performer, and it is not one which will take Yahoo's earnings up sharply.

Yahoo's stock has been trading in the $20 to $30 range for over two years. With quarterly results weakening, the stock is not likely to break $25 very often. Microsoft offered $33 for Yahoo. The portal company's board rejected that. Microsoft and activist investor Carl Icahn has come back several times. There has to be a deal over $30 in there somewhere.

Yahoo is almost certainly not a $30 stock. When it broke off talks with Microsoft, its shares moved down from $33 to under $20.

The Yahoo board should do what BUD did. Get out with a good price while it still can.

Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.

Comments

 

I think it is sad that another great American Giant has given way to a foreign company...I guess their is a going rate on the American Flag...

Thanks for your unbiased input!

Let the market know. Too many CEOs are holding to their jobs and companies to the detriment of the shareholders. Yahoo is just one of the examples. What about Microsoft or Cisco, when are those stocks going to go up. If not, it's about time to either change the stock, change the management or split the company.

J.

It is truly a sad day for America.  AB was one of the last true American Companies and made a huge point of it in their advertising.  It would have been a better move for AB to buy INBEV and still maintained AB as an American Company.

I am disappointed and will vote against the sale with my few hundred votes, not that it will make a difference.  I like to make money like everybody else but I also believe in America and if we keep selling America what is the point.  New owners cut jobs, outsource to other countries and in the meantime American's lose jobs and everything they have worked for.

When can we start to look at what is good for America instead of what is good for stockholders.

A-B wasn't thinking of it employees with this take over- meger. There is unrest amongest the employees at this time becaause they are afraid of what  INBEV will do.

Carlos Brito has stated that he will cut jobs. Starting with can plants and theme parks. He stated that they were there to make beer and the cheapest cost. He has no feelings for the A-B family and neither did the A-B ceo's. These statements were made through the A-B intranet at the plants for all the employees to hear.

Communities will not only lose jobs but Tax money, and other business will suffer because there will be less money to spend because A-B is a large employer.

NO JOBS NO MONEY TO SPEND.

Not to mention the retirees and what will happen to them. I've already heard that some will have to get jobs to pay for insurance. This after they have worked for 25 -30 years and set aside money for their future. That future now looks bleak.

seems to me after all the beer drinkers change to another american owned beer  inbev can be bought for a song and niether ab or inbev will no longer be demand....just my thoughts.....

I quit drinking crappy beer years ago. About the time I stopped driving US made cars. Why buy junk? We really need to reinvent the country.

It's a global economy.  If any people on the globe have great benefits, it's Europeans.   We think just because it's American it's the best.  Not always the case.  The deal is hardly sealed and the fear mongerers are out there talking doom and gloom.  They need to manufacture in the US for transportation costs with the cost of gas.  So what if they go back to their core beverage business and get out of theme parks.   Maybe a company focused on theme parks can run that better too.   You've already got retirees getting jobs to pay for insurance.   I'm not sure what planet you've been living on, but I don't have the possibility of retiree medical in my job.  I would gladly pay something for it to have the chance to purchase it.  Get real!   If InBev can keep AB as a viable employer in the US then people keep working, paying taxes and drinking beer.  You don't think AB management would have cut jobs and benefits if the business couldn't support those benefits?

Ron is the typical traitor, Most likely "supports" the war in iraq yet wont enlist to go fight it (I guess its not THAT important to risk HIS life.) Yet he stays at home waving his flag claiming what a great patriotic American he is......while drinking his foreign beer and driving his foreign cars.(Therefore making THEIR nations stronger and ours weaker.) I'd also be willing to bet Ron would like a tax cut.....while our nation spirals further and further into debt.

Thanks Ron!

i'm with Steve on this ..sounds like Ron ..as many ,i'm guessing 30 year old expatriot - procapitalist egocentric liberals, would rather do buisness with China and a bunch of other communist than support their red white and blue blooded neighbors.

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