$45 Billion is the figure. Steve Ballmer’s offer, a “bear hug” in M&A parlance, was the first step. The letter ended with a mix of conviviality and veiled threat that suggests what might come next. “My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience,” he writes. “Depending upon the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure Yahoo shareholders are provided with the opportunity to realize the value inherent in our proposal.”
Sanford C. Bernstein analyst Jeffrey Lindsay wrote in a research note that “the Microsoft bid of $31 is very astute” because it puts pressure on Yahoo management to take actions that could unlock the underlying value of Yahoo assets, which he estimates are worth upward of $39-$45 a share.
If the Yahoo board digs in its heels, reject Microsoft’s offer, and resorts to its “poison pill”—an anti-takeover maneuver to dilute the value of a hostile bidder’s stake in the company— Microsoft’s next shot would be to file a tender offer and nominate a new slate of independent directors. This is otherwise known as throwing the bums out.
Under Yahoo’s bylaws, the notice for such a proposal and new slate of directors must be issued by March 13—enough time for the Yahoo directors to consider Microsoft’s offer, while each side burns through some very high-priced legal advice, and Microsoft heads toward a possible proxy fight.
Google Lawyers have been blogging about the antitrust, with Microsoft’s bid. Will they succeed? There are lot of action in this space. These are few good articles on this news…
The War for the Internet: Why Yahoo! is Microsoft’s best chance to “kill Google.” is my favourite 😉