Yahoo turns down Microsoft bid
- posted: 19 Feb. 2008
- scrollnews@byui.edu
Microsoft’s offered bid of $44.6 billion to take over Yahoo was officially rejected Monday, according to www.nytimes.com.
Although Microsoft considered the bid a “full and fair proposal,” Yahoo called the bidding price too low, according the article.
Ryan Jacobs, portfolio manager for the Jacob Internet Fund, which counts Yahoo among its top holdings, said that he favored a combination of Yahoo and Microsoft because it would create a stronger competitor for Google. But he also said that the board was right to hold out for a higher offer, according to www.nytimes.com.
Although it isn’t directly involved in the deal, Google is the main reason Yahoo is being pursued by Microsoft, according to www.biz.yahoo.com.
The proposed bid, put Yahoo shares at $31 per share. Bill Miller, the star-stock-picker for Legg Mason Inc., a U.S. asset managing company, estimated the fair value for Yahoo shares at $40 per share. Analysts expect Microsoft to raise its bid to at least $35 per share, according to www.msnbc.com.
Yahoo’s 10-member board — with help from its financial and legal advisers, such as Goldman Sachs, Lehman Brothers and Moelis & Company — said the offer wasn’t in the best interests of the company or its stockholders, according to www.newsfactor.com.
According to the Associated Press, Yahoo’s management has taken steps that have resulted in five consecutive quarters of declining profits. From www.news.com, an estimated 1,110 jobs have been cut this week. Also, by spurning Microsoft, Yahoo has taken to risk of alienating already upset shareholders, according to the Associated Press.
A lawsuit was filed this week against Yahoo by Wayne County Employee’s Retirement System of Michigan, which owns about 13,600 shares of Yahoo. The lawsuit is asking that Yahoo be forced to consider the Microsoft takeover, according to www.news.com.
“It’s frustrating to see the day of independent companies going down the drain and the rising of monopolies. Microsoft is a business world giant and is only getting bigger. It’s becoming a war between Microsoft and Google to get the last of the independent companies,” said Dustin Fadale, a junior studying business management. 
