Feeds

Microsoft to Yahoo!: Surrender or else

Big Steve turns the screw

Secure remote control for conventional and virtual desktops

Microsoft has told Yahoo! that it has three weeks to walk down the aisle - or it will strong-arm the reluctant bride into marriage. If this ends in a proxy battle, Microsoft will almost certainly return with a lower offer than the $44bn bid originally tabled on February 1.

In a letter to the Yahoo! board delivered on Saturday, Steve Ballmer, Microsoft’s CEO, said the substantial premium reflected in our initial proposal [62 per cent more than the closing price immediately before the bid] anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.

Ballmer voiced his company’s frustration with Yahoo!’s dilly-dallying, noting that there has been “no meaningful negotiation to conclude an agreement”.

Yahoo! thinks the bid undervalues the company and has sought a white knight. News International and Time Warner’s AOL have looked at teaming up with Yahoo! – and rejected the idea. Microsoft’s pockets are too deep and the bid on the table is indeed a hefty premium. And Wall Street doesn’t think much of the alternative – an independent Yahoo!. On Friday, Yahoo! shares fell on speculation that Microsoft was preparing to walk away or lower its bid.

According to Ballmer, the bid premium – intended to solicit a quick and friendly transaction – is even more significant today. In his letter he notes:

During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.

Old plans make it more difficult too. In 2001, Yahoo! installed a poison pill to ward off hostile takeovers. Would-be predators are limited to just 15 per cent of Yahoo!'s shares in a tender offer, Marketwatch reports. This is why Microsoft would have to conduct a proxy war to replace Yahoo!’s board with one of its own choosing. We suspect that Yahoo! shareholders will plump for jam today. But first Yahoo!’s board must let them make that decision. Expect a class action if Microsoft wins the day, against the Yahoo! board, and tables a lower bid.

This way for the Ballmer letter. ®

Boost IT visibility and business value

More from The Register

next story
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Premier League wants to PURGE ALL FOOTIE GIFs from social media
Not paying Murdoch? You're gonna get a right LEGALLING - thanks to automated software
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
XBOX One will learn to play media from USB and DLNA sources
Hang on? Aren't those file formats you hardly ever see outside torrents?
Class war! Wikipedia's workers revolt again
Bourgeois paper-shufflers have 'suspended democracy', sniff unpaid proles
'Aaaah FFS, 'amazeballs' has made it into the OXFORD DICTIONARY'
Plus: 'EE, how shocking, ANOTHER problem I face with your service'
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.