Microsoft bids $45,000,000,000.00 for Yahoo
Ummm… WOW!!!! Did you read this on CNN!!! Check it out…
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Software giant makes cash and stock offer of $31 a share, a 62% premium from Yahoo’s closing price on Thursday.
Microsoft Corp. made an unsolicited $44.6 billion cash and stock bid for Yahoo on Friday, a deal that could shake up the competitive and lucrative market for Internet search.
The deal would pay Yahoo shareholders $31 a share, which represents a 62% premium from where Yahoo stock closed on Thursday.
Steve Ballmer, Microsoft’s chief executive, called the move the “next major milestone” for the software giant.
“We are very, very confident this is the right path for Microsoft and for Yahoo,” he said.
Microsoft hopes to close the deal by the end of the year. Ballmer said that Microsoft has been in “off and on” talks with Yahoo for 18 months and said he called Yahoo CEO Jerry Yang Thursday night to tell him the bid was coming.
Microsoft made the bid early Friday. In a statement, the company said the offer allows Yahoo shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the software giant’s offer consisting of one-half cash and one-half Microsoft common stock.
Shares of Yahoo (YHOO, Fortune 500) shot up 50% at the start of trading Friday, while shares of Dow component Microsoft (MSFT, Fortune 500) tumbled 4.5%.
In a statement, Yahoo acknowledged receipt of the offer and said its board would evaluate the proposal “carefully and promptly.”
Both Microsoft and Yahoo have fallen far behind rival Google (GOOG, Fortune 500) in the lucrative field of Internet search. Yahoo’s earnings and share of the online search market have badly trailed Google.
In a letter it sent to Yahoo’s board of directors, Microsoft disclosed it had explored a Microsoft-Yahoo deal a year earlier, only to be rebuffed by Yahoo, which said at that time it was confident of the “potential upside” for Yahoo from operational changes it planned.
“A year has gone by, and the competitive situation has not improved,” Ballmer.
On Thursday, former Yahoo CEO and current Chairman Terry Semel, who opposed an earlier approach Microsoft made last year, resigned from the Yahoo board.
Yahoo announced Tuesday it would lay off 1,000 employees by mid-February, citing what CEO Yang described as “headwinds” facing the company. It also reported lower fourth-quarter earnings that still beat Wall Street’s now modest expectations for the firm, but it gave a 2008 revenue forecast that disappointed analysts.
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