The Fight for Yahoo

The more I think about it, the more I like this idea of a joint bid for Yahoo (YHOO) from Microsoft (MSFT) and News Corp. (NWS). The bits of Yahoo which Microsoft doesn't want - call them "content", if you like - are precisely the bits which Murdoch would love. Meanwhile, as Sam Gustin points out, the Yahoo-AOL-Google (GOOG) rival approach seems to have a zero chance of passing regulatory muster.

The whole situation reminds me weirdly of the fight for ABN Amro. The deal that the target company wanted, with Barclays (BCS), never worked out, partly because Barclays stock was about as healthy as Time Warner's (TWX). In the end the bank got sold to a consortium of strategic bidders: an approach which managed to multiply synergies.

The biggest winners of all in that deal, of course, were ABN's shareholders, which means that anybody holding Yahoo on Wednesday night is waking up smiling on Thursday. It's still conceivable Yahoo will be sold for $31 a share; it's pretty much unthinkable at this point it will be sold for any less. And it might well now go for significantly more. Expect the risk-arbs to have a lot of fun today.

Comments

[steveballmer]

This Jerry Yang guy is really standing up to me! My letter to Yahoo did not scare him or his board at all!
He sent back this response:
"We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders," read the statement.
He called me a liar several times:
"Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo."
Then he got mean:
"We consider your threat to commence an unsolicited offer and proxy contest to displace our independent board members to be counterproductive and inconsistent with your stated objective of a friendly transaction,"

This guy has really got moxie! Too bad I'm going to have to totally destroy him!
By the time I'm finished with him, he will be eating spam and living in a cardboard box!

Mark my words people! I will have Yahoo, even if I have to destroy it!