Microsoft Bid for Yahoo Building Momentum

Discussion in 'In The News' started by gspot, Oct 20, 2011.

  1. gspot

    gspot VIP

    Apr 8, 2011
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    Microsoft’s latest attempt to purchase Yahoo is gaining momentum again. According to The Wall Street Journal, Microsoft is working with the Canada Pension Plan Investment Board and Silver Lake Partners, a private equity firm, to put together a bid to buy Yahoo.

    The proposed deal includes Microsoft paying “several billion dollars” with Silver Lake and the CPP Investment Board supplying the rest of the equity, all of which is being arranged by unnamed banks.

    This is not the only group of investors who are considering a bid for the purchase of Yahoo, according to The Wall Street Journal, which says there are “at least nine private equity firms … studying a potential buyout.”

    This latest information comes just a couple of weeks after the news broke that Microsoft might seek a partner for a Yahoo bid. Microsoft appears to want some control over Yahoo’s future but might be gun shy to go it alone due to its spurned offer for Yahoo in January 2008.

    In that deal, Microsoft submitted an unsolicited $44.6 billion bid (equal to $31 per share then) for Yahoo, but the prospective purchase was fended off by Yahoo management and resulted in the two companies agreeing to a search partnership and the ouster of then-CEO Jerry Yang.

    That deal didn’t work out well for Yahoo either as its stock price plunged from $29 just before it had refused Microsoft’s offer, down to $15 per share by this September. However, when talks heated up again in early October of this year, Yahoo’s stock started inching upward.

    Now, according to The Wall Street Journal, some private equity firms are saying the deal could be done for between $16 and $18 per share. Yahoo stock closed Wednesday at $15.94 per share.

    We’ve contacted Microsoft and Yahoo for comment and will update this post when we get a response.

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