Yahoo had already informally rejected Microsoft’s initial bid. However, the giant software company is still waiting for Yahoo’s formal letter of rejection before moving forward towards its next plan. Microsoft’s next step is most likely to appoint a new set of directors which should be done by March 14.
Microsoft could not see a possible reason for increasing its bid for Yahoo. A reliable source had stated that Microsoft is not up to bidding against itself until Yahoo shows up and become willing to cooperate in the bargaining table. New York Times Deal Book had stated that Microsoft is willing to move forward with proxy battle with Yahoo.
Yahoo had remained silent since Microsoft’s offer had been made. According to a Microsoft spokesperson, until Yahoo makes a formal statement and responds to this issue, there is no point for Microsoft to increase its bid. This is similar to bidding against itself.
This formality that Microsoft is waiting for from Yahoo is quite questionable considering that its unsolicited bid which initially amounted to $44.6 billion equivalent to $31 per share had undervalued Yahoo. However, a formal move from Yahoo is most likely expected by the giant software company into order to have the ball back.
For formality’s sake, Microsoft is waiting to receive a letter of rejection coming from Yahoo’s side stating that its offer is being rejected because they believe that Yahoo has a far higher value than what is being offered. Microsoft made a statement in CNET.com that Yahoo should express its willingness to communicate and converse regarding the matter. Microsoft’s response will be available for them within 24 hours. Furthermore, Microsoft stated that they prefer the transaction to be done in a friendly manner.
A banker not involved with this transaction had stated that the probable reason why Yahoo is currently not releasing its statement is because it does not want to engage until it has completely explored and studied all of its other options.
An attorney who refused to be named could not determine strategic advantages with relevance to this action in order to forgo formal response. Moreover, Yahoo may be thinking that a formal letter is inappropriate at this point. 20 days had already passed since Microsoft had made its unsolicited offer.
Meanwhile, Microsoft is making strict considerations with regards to the retention of Yahoo employees which happened to be an important element of the deal.
One report came out stating that later this week; Microsoft had made plans of authorizing a proxy fight. Yahoo did not make any immediate comment on this next step expected from Microsoft.
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Comments
khairilhusni said on February 22nd at 11:24 pm,
Myspace + Yahoo makes me sad. Yahoo, in my opinion, has been on an uptrend when it comes to innovation and embracing the real spirit of Web 2.0. Myspace is outdated, on a downtrend, and needs some serious, serious revamping if they want to compete with Facebook (which, again, has embraced Web 2.0).
Mark Johnson said on February 25th at 07:45 am,
I heard from many sources that yahoo has been downsizing its employees across the world and not sure whether it is true or not. But i guess they are playing a hide and seek game with microsoft and this downsizing of employees has got to do something with their rejection and wait and watch approach. Time will tell what will happen soon.