In an aggressive move by Redmond giant Microsoft, a $44.6 billion offer was made for Yahoo! after the latter reported poor 4th quarter earnings. That and the pending thousands of layoffs from the internet portal. Yahoo’s stocks dropped to about 10% after trading hours.
The offer boils down to about $31 per share in cash and stock. Rumors of the possible offer dates back to May 2007 when a potential $50 billion offer was being floated and that’s not even the first time. This time around, Microsoft is serious. As AP reports:
To underscore its resolve, Microsoft is offering a 62 percent premium to Yahoo’s closing stock price Thursday. If the deal is consummated, it would be by far the largest acquisition in Microsoft’s history, eclipsing last year’s $6 billion purchase of online ad service aQuantive.
Since reaching a 52-week high of $34.08 in October, Yahoo shares have fallen 46 percent. Yahoo climbed $9.41 a share, or 49 percent, to $28.59 in morning trading. Microsoft shares fell $1.43, or 4.4 percent, to $31.17.
Microsoft publicly disclosed its cash-and-stock offer in hopes of rallying support from Yahoo’s shareholders, making it more difficult for Yahoo’s board to turn down the bid.
The announcement lifted Yahoo’s share price by almost 50 percent in morning trading, while Google fell almost 8 percent. Is Yahoo a good buy to Microsoft? I’ve discussed some points about this possible acquisitionand the overlapping products and services here . As long as Yahoo! gets to retain its name/brand, the added infrastructure and combine advertising resources will help the company regain its market share.
More of my analysis here.