Is Something Cooking in Microhoo's Kitchen? (Update)

Update: Reuters has reported that Microsoft is evaluating its bid and could walk away from the deal. Yahoo shares are down 5 percent in afterhours trading. Looks like things are about to get really interesting.

Maybe this is just saber rattling, but if you’re a Yahoo shareholder you have to be spooked. There will be a lot of updated posts on this one.

Original post starts here:

Welcome to installment 4,500 of the Microsoft-Yahoo drama. Microsoft (MSFT) and Yahoo (YHOO) reportedly had informal talks this week, but got nowhere.

Now what? CNBC’s Jim Goldman reports that the two have chatted this week, but Microsoft wouldn’t raise its offer and Yahoo wouldn’t go beyond informal talks (see Microhoo roundup).

Goldman reports:

I hear there’s an important meeting at Yahoo coming up this Monday that will include top execs and division leaders. I’m hearing it’s an all-hands-at-the-executive-level type of thing. Is this the meeting that Microsoft has been waiting for? Is Yahoo ready to throw in the towel and it’s holding this meeting to notify managers that a deal is imminent?

Goldman argues that it's unlikely Microsoft will walk and I’m inclined to agree. In any case, the pressure will mount on Yahoo management.

What I really don’t get is why Microsoft doesn’t just start accumulating shares. There are no other bidders and Yahoo is well below Microsoft’s bid. Enough of this banter. Steve Ballmer needs to start buying some Yahoo shares.

Comments

[Warra:]

Maybe MSFT is waiting for YHOO's earnings announcement and expecting their shares to drop even more...

2008 Apr 04 01:46 PM

[vboring:]

maybe it is an idiotic idea and MSFT is looking for a way to quietly back out.

yahoo brings nothing but headaches and redundant divisions to MSFT.

2008 Apr 04 02:01 PM

[Longtime Li...:]

I am not entirely sure Microsoft can legally buy yahoo's shares in the open market given their intentions and statements. If they were to accumulate shares it may prevent them from doing a tender offer in the future, etc. I think you should look into these legal aspects and get back to us.

2008 Apr 04 02:24 PM

[Tom B:]

I agree with vboring, except he has it backwards. MSFT would be the dead weight in MicroHOO.

2008 Apr 04 04:06 PM

[John Capozzi:]

MICROSOFT is going to raise the bid to bring all to the table. My only hope is that they include Allibba and Softbank in the meeting. When they finally sit done in formal talks all together they will come to an agreement that will satisfy all. Microsoft is in no position to lose Yahoo. They will make a good will raising of the bid to get all into formal talks and then they will go 24 hours a day to complete the deal. Neither of all three companies can wait no longer. Google is working very hard to increase their share of the market before Microsoft and Yahoo merge. The final closing deal as i see it will be between 38 to 43 dollars a share. Citicorp has been pumping this deal all week and even raising Yahoo to a buy. This deal will close sometime next week or the anouncenment of the meeting which is strange to anounce at this time can only mean the deal is done. Good LUCK TO ALL YAHOO AND MICROSOFT INVESTORS. IF PUT TOGETHER CORRECTLY THE NEW GIANT COMPANY WILL BE ABLE TO BREAK GOOGLES MONOPLY.

2008 Apr 04 04:18 PM

[GKM:]

I hope that Mr. Softy simply pulls the bid and then starts buying in the market. If they pull the bid, I'll buy back into MSFT for sure. If they proceed with the bid as is or even raise it, I will know to short them.

2008 Apr 04 07:21 PM

[farsighted:]

Microsoft is a crappy monopolistic company using its muscle to push Yahoo into a deal they never wanted. It is now throwing its weight around to pressure them into selling cheaply. I've always hated this company and their tactics and I hope they end up paying for their arrogance. I wish Yahoo and their employees best of luck. May the underdog win!

2008 Apr 04 07:55 PM

[User 173351:]

Yahoo shareholders should sue Yang and his cohorts for blocking the Microsoft takeover. They are putting their interests above the shareholders

2008 Apr 05 03:48 AM

[GKM:]

Ibotez, I'm not sure if you are aware but Yahoo was offered $31/share when it was trading at less than $19. $19 is cheap, $31 is rich. Now Yahoo is trading at $27. $27 is less than $31. MSFT did Yahoo a favor and dragged the stock out of the gutter. They should do themselves a favor and put it back there and wait for the Yahoo's to come calling begging for a take over. If you believe Yang and think Yahoo is worth $40 - I wish you the best of luck.

Btw, anyone notice how bad Yahoo Finance has become. I was a regular user but have stopped since it became too painful. They can have their service and their shares.

2008 Apr 05 03:22 PM

[Bill West:]

I reiterate my previous opinion when this MicroHoo came to the forefront...........It would be awesome for Google to come in and snatch Yahoo from MrSoftee. ......Don't think it would pass DOJ anti-trust muster but who knows.......
Good luck to the Yahoo investors.
Disclosures- Long Google

2008 Apr 05 08:00 PM

[TA:]

GOOG doesn't want YHOO more than anyone else does.

Now it's up to the shareholders to hold Yang's feet to the fire. The only justice would be for the board to get tossed and end up with nothing(fat chance)

Please MSFT pull the bid and pick up the pieces later...

2008 Apr 06 12:37 AM