And the plot thickens.
SAN FRANCISCO (Reuters) - Yahoo Inc's (YHOO.O) board believes Microsoft Corp's (MSFT.O) unsolicited bid of $44.6 billion to acquire Yahoo "massively undervalues" the company and directors are set to reject the offer, the Wall Street Journal reported on Saturday, citing an unnamed source.
Microsoft's $31 per share offer fails to take account of the risks that a merger between the world's largest software maker and Web media giant would be rejected by regulators, the paper reported, citing "a person familiar with the situation."
[From Yahoo board set to rebuff Microsoft bid: report - Yahoo! News]
There is a lot of activity on the web due to the leaked announcement, so far my favorite reads are Phil Greenspun's position that the "Yahoo Board seems to be insane" and the obligatory clusterfuck over at Slashdot.
What I find shocking is how basically everyone noticed that the bid is simply crazy. I know literally nothing about corporate finances, but I can tell that there has to be something wrong with a company that is trying to buy another one for 62 times the amount it earns.
Not only is that crazy, but then the Yahoo board counter offers for $40. Even if this a negotiation so both sides agree on $35, for fuck's sake, what the hell?
Is it even legal for the Yahoo board to turn down such an offer? Whatever happened to the grand old American tradition of "take the money and run?"
So far the predictions that I have seen are so wild that I may have come up short when I started describing this mess as a soap opera:
1. Yahoo counter offered $40 so both sides would meet at $35.
2. Yahoo has some other deal that lets them float without getting swallowed whole.
3. Microsoft doesn't care how much they have to pay for Yahoo. They can turn around and turn this into a real hostile takeover attempt.
I bet Microsoft stock holders are excited about the prospect of the company blowing their cash reserves into AOL/Time Warner part II.
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