Yahoo! is reportedly seeking to restart merger discussions with AOL in a bid to fend off the $45 billion (£23 billion) hostile takeover bid from Microsoft.
A report in today’s
Times says that the internet giant and its advisers from US investment banks Goldman Sachs and Lehman Brothers have spent the past week looking at possible tie-ups with other firms in order to save it from a Microsoft takeover (see
Microsoft Bids $44.6bn For Yahoo!).
It adds that as well as a possible merger with AOL, Yahoo! is also exploring tie-ups with groups such as Disney and Google (see Google Proposes Yahoo! Partnership).
It is believed that the Yahoo! board will today announce that it has turned down the Microsoft bid because it significantly undervalues the company.
The current Microsoft bid would see it pay $31 in cash and shares, valuing Yahoo! at just under $45 billion.
The Yahoo! board will not even consider starting talks with Microsoft unless it offers at least $12 billion more, said the Times.
The Times quotes a source close to Yahoo! as saying: “All they [Microsoft] are trying to do is pick off the company on the cheap. They’re trying to steal it. And the board is not going to let that happen. They have gone for a valuation that reflects the five-year low of the stock.”
The source added: “It would have to be in the 40s to start talking, and we would have to get over regulatory issues. It would have to be an offer that would give Jerry Yang something to stand on a podium and smile about.”
At the end of January, Yahoo! announced that its profits fell 23% to $206 million in the fourth quarter, down from $269 million a year earlier (see Yahoo!’s Profits Fall).
It also confirmed plans to cut 1,000 jobs, its first cuts in six years and representing 7% of its workforce.
Related Links
