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Report says Microsoft ups offer for Yahoo

SAN FRANCISCO — Microsoft Corp. reportedly dangled a higher takeover bid in front of Yahoo Inc. on Friday, hoping to reach a friendly deal after weeks of saber rattling.

The software maker, based in Redmond, Wash., upped its offer "by several dollars" per share, according to a New York Times report that cited unnamed sources.

Representatives from Microsoft and Yahoo declined to comment on the negotiations, which were confirmed by a person familiar with the talks. The person didn't want to be identified because the talks are still confidential.

Yahoo began pressing for a higher offer shortly after Microsoft made its unsolicited bid in February, which was originally valued at $44.6-billion, or $31 per share.

That offer, which was made half in cash and half in stock, is currently valued at $42.3-billion, or $29.40 per share, because Microsoft shares have declined.

Microsoft chief executive Steve Ballmer had held firm with the original offer, insisting it was fair in light of Yahoo's eroding profits during the past two years. He threatened an attempt to oust Yahoo's board if the 10 directors, including chief executive Jerry Yang, didn't accept the offer by April 26.

Now that Yahoo has forced the issue by letting the deadline pass, Ballmer appears ready to put more money on the table.

Microsoft's board reportedly met earlier this week to consider raising the bid as high as $33 per share.

It wasn't clear whether Microsoft presented that figure, which would translate to about $47.5-billion for the deal, to Yahoo on Friday.

Several of Yahoo's shareholders are reportedly looking to sell their stakes for at least $35 per share, a price that would value the deal at about $5-billion.

"It's all going according to script," said Ken Marlin, a New York investment banker specializing in technology deals.

Thursday, May 1

"I know exactly what I think Yahoo is worth to me, exactly. I won't go a dime above, and I will go to what I think it's worth if that gets

the deal done."

Monday, April 28

"By this point if they (Yahoo) don't agree, we would have to take our arguments directly to the shareholders. We will see what

they do, and we will move appropriately at that point."

Wednesday, April 23

"We are offering a lot of money. If Yahoo's shareholders like it,

that's great. We are prepared to go forward without a merger."

Report says Microsoft ups offer for Yahoo 05/02/08 [Last modified: Thursday, October 28, 2010 1:29pm]
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