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Yahoo has made it official, as had been expected. They have rejected the unsolicited bid from Microsoft. Yahoo said:
Quote:
The board believes that Microsoft's proposal substantially undervalues Yahoo, including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments.
The Yahoo statement seems to say that they are willing to listen to higher offers from Microsoft or someone else. No other company has yet made a firm offer to buy Yahoo.
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Sounds like Microsoft is not backing down and wants to go
the hostile takeover route. They just responded to Yahoo's rejection with this...
Quote:
"It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties."
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As Linda mentioned, it doesn't look as if Microsoft plans to go down without a fight. I'm expecting Michael Buffer to appear on the scene at any moment.
I thought that was a good joke. Then I realized that there are going to be some people who won't get it. Michael Buffer is known to sports fans. His most famous words are: "Let's get ready to rumble."
It looks that if Microsoft decides on a hostile takeover, then Yahoo could have some problems. A lot of companies have it so that not all of their board of directors are up for re-election at the same time. That isn't the case with Yahoo. Their entire board is up for re-election at the next shareholder meeting.
Quote:
That could make it easier for Microsoft to nominate a new slate of director candidates and win control of the board in one session.
But Yahoo does have what is often called a "poison pill." It is a shareholders rights plan that could make it hard for Microsoft to take control of the company by going directly to the shareholders.
Microsoft would automatically be limited to 15 percent of Yahoo's outstanding shares in a tender offer.
On semi related news. The Yahoo layoffs have started.
Lots of people are being let go. Some are blogging their termination and some
are twittering a blow by blow account about what happened today at Yahoo as they were called to HR, asked to clean out their desks and turn in their laptops. Sounds like quite a few higher ups lost it too.
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Now there are reports that Rupert Murdoch and his News Corp are involved in talks about a possible deal with Yahoo.
It is reported that News Corp would combine MySpace and other internet properties with Yahoo, but not all of the News Corp Internet properties. News Corp would also give 15 billion dollars to Yahoo and News Corp would own at least 20 percent of Yahoo. There are also reports that with this plan Google could also become involved with an advertising arrangement.
It is being reported that this isn't something that just happened but that News Corp and Yahoo have been having talks about this for 18 months. However things have become more serious after the Microsoft bid.
There are some who don't believe this is all that serious and is an effort to try to get Microsoft to increase their bid.
This continues to get more complicated. Here are some articles with more details:
Microsoft wants Yahoo to start negotiating to sell. If not Microsoft plans a proxy fight.
Microsoft would nominate directors for the Yahoo board and try to get the majority of Yahoo stockholders to approve.
A proxy fight would be much cheaper for Microsoft than raising their offer. It is being estimated that a proxy battle would not cost Microsoft more than 30 million dollars. It would cost Microsoft 1.5 billion dollars for every dollar a share it raised its bid.
Yahoo stock has gone up 55 percent since the Microsoft deal was first announced. Microsoft stock has gone down 13 percent, so the value of the bid is now less than the original 44.6 billion dollars.
Yahoo has just come up with new new severance plans in case of a takeover that would make the deal more expensive for Microsoft.
There is a lot more information on this and these articles have it:
Microsoft has said it won't completely do away with the Yahoo headquarters in Sunnyvale, California if they are successful in buying Yahoo.
Microsoft also said even though there would be some duplication in a combination of the two companies they would look to place Yahoo employees throughout the company.
This seems to be in response to the new Yahoo severance plans.
Quote:
All the company's full- time workers who lose their jobs without "cause" or quit "for good reason" after a Microsoft takeover would continue to receive salary and health insurance for four to 24 months, plus other benefits.
Some look at the "good reason" as being required to relocate to Microsoft headquarters in the state of Washington.
Obviously employees are essential to the success of a business and Microsoft wants to keep key employees. But a lot of people don't like hostile takeovers and the Yahoo culture is different than that of Microsoft.
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