Analysts Say Microsoft-Yahoo Mating Dance Has Only Just Begun
Yahoo’s formal rejection of Microsoft’s $44.6 billion bid left the door open to give Yahoo management a chance to propose a plan to boost the stock above Microsoft’s bid, to solicit rival offers, and to attempt to raise the offering price from Microsoft, analysts say.
Analysts believe result of it all will still be a deal between the two companies, writes the Los Angeles Times.
Microsoft is not believed to have put its final offer on the table. "What Microsoft wants is someone to sit down and negotiate with them," Ken Marlin, managing partner of Marlin & Associates, is quoted as saying. "The Yahoo board’s not quite ready to do that. But they will get there."
Microsoft has two options at this point: to sweeten its offer enough to win over the Yahoo board, or to turn hostile, take its offer directly to shareholders and launch a proxy fight to gain control of the board and the company.
For Yahoo, the question is not whether to merge, but how high a price it can get, says Bill Burnham, a managing partner at hedge fund Inductive Capital.
Meanwhile, Yahoo is taking a step called for by analysts and laying off 1,000 of its workers today.