Yahoo and Microsoft Update

Short version: It looks like Yahoo is going to say no. Will Microsoft go directly to shareholders? If so at what price?

Bloomberg.com: Worldwide:

"Yahoo! Inc., the Internet company that has failed to crack Google Inc.'s dominance of Web search, plans to reject a $44.6 billion takeover bid from Microsoft Corp., a person familiar with the situation said.

The board spent a week reviewing the $31-per-share unsolicited offer before deciding it was too low, and directors are likely to reject it tomorrow, said the person, who declined to be identified because the discussions aren't public. Yahoo wants at least $40, the Wall Street Journal reported yesterday."

From MarketWatch:

"Anticipating a rejection of its takeover bid by Yahoo Inc.'s board of directors on Monday, Microsoft Corp. is preparing to take its unsolicited $44.6 billion offer directly to shareholders....Microsoft...also has hired a team of proxy experts to prepare for a possible battle, the Financial Times reported in its online edition."

From the Financial Times:

"Microsoft is gearing up to take its bid to acquire Yahoo directly to the Silicon Valley company's shareholders after the expected rejection by the Yahoo board of the software group's $31-per-share offer....The moves pointed to the possible outbreak of a protracted and bloody takeover battle but they are seen in some quarters as opening shots in a negotiation of how much Yahoo is worth and what Microsoft should pay to win control."

From the BBC

"..if Jerry Yang and his fellow directors are shutting the door to Microsoft they will need to explain to their shareholders exactly what their alternative strategy is. Because it seems impossible that Yahoo can survive as an independent business - unless it manages to convince the regulators that an informal alliance with Google is no threat to competition, which seems unlike"

From the London Times online

"Yahoo! is seeking to restart merger talks with AOL as a means of defending itself against the $45 billion (£23 billion) hostile bid approach from Microsoft, The Times has learnt.

It is understood that Yahoo! and its team of advisers from Goldman Sachs and Lehman Brothers, the US investment banks, have spent the past week evaluating possible tie-ups with media and technology firms that would save it from being swallowed by Microsoft.

It is also understood that one option being explored is to restart merger talks with AOL, the online business owned by Time Warner. Tie-ups with groups such as Google or Disney are also being considered. "

And already shareholder groups are lining up looking to sell their shares. From Reuters:

"...an outspoken group of 100 current and former Yahoo employees that own 2.1 million shares and call themselves "Yahoo Plan B," said his group was prepared to negotiate separately with Microsoft or any other bidder. "We have no desire to see Yahoo! continue independently with the current board and management team in place.

I told you this was going to be interesting!