Yahoo won't settle for less than $56 billion

Yahoo won't settle for less than $56 billion

Summary: It sounds like it's official, Yahoo will be rejecting Microsoft's bid to take over Yahoo for $44.6 billion in cash and stock.


It sounds like it's official, Yahoo will be rejecting Microsoft's bid to take over Yahoo for $44.6 billion in cash and stock. Yahoo's board of directors is hoping that Microsoft won't "go hostile" and just steal the company anyway. If Microsoft does goes against their wishes, it's likely the partnership would ultimately be a failure.

Yahoo's board appears to be betting that Microsoft doesn't want to "go hostile" and try to acquire the company against the wishes of management and the board. Such a course could cause deep resentment among the rank-and-file engineers whose cooperation is crucial to the company's success. -- WSJ

A person familiar with the situation says that Yahoo will not consider an offer below $40 per share, which equals something in the neighborhood of $56 billion. Considering Microsoft must borrow to satisfy their original offer, throwing in an extra $12 billion won't be an easy decision for Ballmer to make.

So there are three options Microsoft has:

  • Take Yahoo for $44.6 billion and risk making it a failure before it even has a chance
  • Borrow $12 billion more to secure the deal and have a better chance of the deal working out favorably
  • Run away with their tail between their legs

Personally, the last option is the only one that makes sense to me. If Microsoft goes through with the deal, even after Yahoo's rejection, it will be interesting to see outcome.

Topics: Legal, Enterprise Software, Microsoft, Social Enterprise

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  • You think the rank and file

    care what their board thinks? I.E. just because the board approves it, they'll be happy? The top talent in Yahoo will make their own decision. If they don't like working for MS, they'll leave regardless. That risk is inherent. The lesser talent can head to the unemployment office if they don't like it - that is the way things are, especially in darkening economic times.

    Run away with their tail between their legs? Well, I suppose that means every losing bidder on eBay is running away with their tail between their legs. But then, I never saw this writer's stories as fountains of objectivity, anyway.

    Given the near-total lack of leverage of Yahoo, I would say raising the ante more than $3-4 a share would be caving in. If that board gets $40 a share, they're smarter than everyone thought, with a recessionary economy on the horizon. If even Google can lose 40% share value in 2 months, where does that leave Yahoo without the takeover offer propping the share price up?
    • Yahoo is headed down

      MS should just leave Yahoo, their share price will most likely fall.

      If Yahoo enters into a deal with Google, Google wont do it to help Yahoo, its just to further Googles agenda.
    • Will there be

      a mass exodus from Yahoo, but Microsoft just try to hide it?
  • Run away with their tail between their legs?!?!?!

    Microsoft is already offering a premium for Yahoo. How is over paying running with
    their tail between their legs? This is a negotiation tactic in an attempt to get more than
    $31/share. No matter what Yangs passion for the company he has to look out for the
    shareholders interests.
    • Just walk away and move on to something that makes more sense.

      Either way, I think this is good for MS (if they walk away).

  • Ballmer not go hostile?

    Isn't that his middle name?
  • To get it closed, Google would be more than willing to loan them 12 billion

    Of course, Google might not ever see the money, but, so what??

      Smartest comment to this post is parent. Good call. Google should donate the $.

    I think this is the smartest comment to this issue. Google should DONATE the money to MS for this purchase. Yahoo's assets are playful at best. If MS bought Yahoo the only one who benefits is Google who will win Yahoo's best engineers as well as watch MS's might fall even more as they try to absorb the fluff that makes up Yahoo.
    • very true

      no need for MS to go down with Yahoo. Let them go down by themselves.
  • lol

    run with tail between the legs!??? have you gone out of your mind!? No body could even match the MS offer. including google, you google fanboy!
    • and?

      Who says yahoo must sell, anyway?
      If they run away, yahoo will continue to run itself, as it would have if microsoft hadn't brought up the idea in the first place!
    • Why do people presume...

      That someone (Microsoft or whoever) has to buy Yahoo?
  • Right on Yahoo!

    Finally a company that can stand against Microsoft, even when facing financial troubles. Here's to hoping that Yahoo! can turn around their financial troubles without Microsoft's assistance. :)

    - John Musbach
    John Musbach
  • RE: Yahoo won't settle for less than $56 billion

    Yahoo take the money an run,you might lose your market values
  • Some other companies would of said ' Dumb'

    Yahoo take the money,who says the bottom will not drop out of your wealth.
    • Dumb = selling out

      If they sell out, their future is very bleak. They'll end up contaminated with Microsoft's 2 bit thinking and "sod the consumers" attitude.

      Yahoo would do better to release a Distro than to get sucked into MSFT.O cesspit.

      Microsoft is proof that capitalism doesn't work, it just forces it's grubby thieving fingers into everybody's lives by force.
  • $ 60 billion will do it for Yahoo by Microsoft. YAHMic!

    Again, the deal will be finalized with $ 60 billion dollars. The new company will be YAHMic! aka Yahoo by Microsoft.

    billy yang