Microsoft has made another attempt to buy Yahoo!. This is not the first time, but it is the most public. The timing is not surprising, coming just hours after Terry Semel resigned from Yahoo!’s board. What this tells me, once again, is that Semel was bad for Yahoo!, clearly having gave Microsoft the impressing “as long as I’m here, it’s not going to happen”.
I don’t see how Yahoo! can turn down this latest offer. Microsoft has gone to the streets this time, making the offer public, knowing the public pressure would help the deal go through. Yahoo! stock (YHOO ) closed at slightly above $19 last night, just before Microsoft made an offer of $31 (which is about where YHOO was when I left last year). This is a very agressive offer, but Ballmer knows the resistance within Yahoo!’s board to a takeover, so a premium makes sense. If the offer gives Yahoo!’s stock a +50% bounce (currently YHOO is at $28.60), there is no way Yang can turn down the offer. Pushing Microsoft away, again, would likely send the stock down near $10. That’s a loss of value that stock holders really can’t accept at this point.
Yahoo! may play coy here, trying to get Microsoft to sweeten the deal, but in the end the deal will go through.