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As promised, we are keeping you up to date on this developing story…  As  we reported yesterday, 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 26th.

Since 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 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 about $50 billion. Most analysts have predicted all along that Microsoft eventually would buy Yahoo for $32 to $35 per share, so the news of Friday’s negotiations wasn’t a major surprise.

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

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