Microsoft Offers To Buy Yahoo

1 Feb

microhoo.jpgBy Jeff Buechler— As my sources had shared with me and as I had written about a month ago, Microsoft has made an offer to buy Yahoo for about $44.6 billion, or $31 a share, in a mix of cash and stock.  The offer represents a 62 percent premium over Yahoo’s closing stock price of $19.18 on Thursday.

Steve Ballmer, Microsoft’s CEO said in a statement, “We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.”

Yahoo response:

Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today said that it has received an unsolicited proposal from Microsoft to acquire the Company. The Company said that its Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.

Technically it may have been unsolicited but there were plenty of ‘what if’ discussions prior to this offer. Whether efficiencies in the two companies can be achieved is primarily going to be based on the execution. Time will tell how the two very different strengths of each company can be leveraged to produce a sum greater than its parts.

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