This morning, Microsoft signaled to Yahoo in a very public way that it won’t raise its bid on its proposed acquisition. Sources “close to the company” (possibly the investment bankers trying to orchestrate a deal) tell the Wall Street Journal that Microsoft is standing firm on its initial offer of $31 a share (which has now declined in value, in step with Microsoft’s stock price, from $44.6 billion to about $42 billion). The WSJ reports (subscr. req.):
“There’s no reason to bid against ourselves,” one of these people said.
Microsoft’s strategists believe that time is on their side, the people close to the company say. The strategists argue that Yahoo’s recent roadshow failed to dazzle investors and nothing in its presentations will justify a higher price, the people say. In addition, the strategists argue that the worsening economic downturn and stock-market weakness make the original bid look even more generous.
Thus the negotiations through the press continue. The WSJ also suggests that Microsoft won’t reveal its alternate slate of directors until it has to—and that won’t be until ten days after Yahoo announces the date of its 2008 shareholders meeting, which it has yet to do. Who will blink first?
Meanwhile, in an April Fool’s joke that Microsoft and Yahoo shareholders might find distasteful, InfoWorld put out a false report that the deal actually did go through today. The worst part is that it wasn’t even funny, except for this single line:
Employees that Microsoft decides to retain will be offered an Xbox 360 game platform and a Zune music player as tokens of appreciation