The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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From: Travis_Bickle	2/9/2008 12:05:45 PM
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DJN: =WSJ: Source: Yahoo Bd Plans To Reject $44.6B Microsoft Bid (Dow Jones 02/09 11:54:04) By Matthew Karnitschnig Of THE WALL STREET JOURNAL Yahoo Inc.'s (YHOO) board plans to reject Microsoft Corp.'s (MSFT) unsolicited $44.6 billion offer to acquire Web giant, a person familiar with the situation says. After a series of meetings over the past week, Yahoo's board determined that the $31 per share offer "massively undervalues" Yahoo, the person said. It also doesn't account for the risks Yahoo would be taking by entering into an agreement that might be overturned by regulators. The board plans to send a letter to Microsoft on Monday, spelling out its position. (This story and related background material will be available on the Wall Street Journal's Web site, WSJ.com) Yahoo's board believes that Microsoft is trying to take advantage of the recent weakness in the company's share price to "steal" the company, the person said. The decision to reject the offer signals that Yahoo's board is digging in its heels for what could be a long takeover battle. The company is unlikely to consider any offer below $40 per share, the person said. It's unclear whether Microsoft would be willing to pay such a premium, which would increase the value of its original cash and stock bid by more than $12 billion. The rejection comes as Yahoo's board has been considering various other scenarios, including a search advertising partnership with Google Inc. (GOOG). Yahoo's directors are still considering that and other options that would safeguard the company's independence, people close the company say. 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. A hostile takeover could also make it more difficult to get the deal past regulators if Yahoo management tries to convince authorities that the deal is anticompetitive. Yahoo has taken "poison pill" provisions to prevent an unwanted takeover. Microsoft would likely have to oust the board in order to overturn them. -By Matthew Karnitschnig, The Wall Street Journal; matthew.karnitschnig@wsj.com (END) Dow Jones Newswires February 09, 2008 11:54 ET (16:54 GMT)

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