Microsoft Abandons Yahoo Takeover After Price Fight
SAN FRANCISCO - Microsoft Corp withdrew its offer for Yahoo Inc on
Saturday after negotiations fell through because Yahoo wanted more
than the $33 a share that Microsoft was willing to offer.
Microsoft Corp. has withdrawn its $42.3 billion bid to buy Yahoo Inc.
In a letter to Yahoo Chief Executive Jerry Yang, Microsoft CEO Steve
Ballmer said the company raised its offer by about $5 billion to $33 a
share, but Yahoo wanted $37 a share.
Despite our best efforts, including raising our bid by roughly $5
billion, Yahoo! has not moved toward accepting our offer," Ballmer
said in a statement.
"After careful consideration, we believe the economics demanded by
Yahoo! do not make sense for us, and it is in the best interests of
Microsoft stockholders, employees and other stakeholders to withdraw
our proposal," said Ballmer.
``Unbelievable,'' said Laura Martin, an analyst at New York- based
Soleil Securities Corp. ``This is management putting its employees and
its job security ahead of current Yahoo shareholders' interest.''
But the breakdown in the talks is likely to send Yahoo's shares
plunging and generate uncertainty among investors about the company's
management. Yahoo has been exploring alternatives to Microsoft's bid,
including a search advertising partner****p with Google, which could
lift its profits and perhaps its stock price, analysts say.
Yahoo Shares
She estimated Yahoo shares will fall $8, or 28 percent, on Monday (May
05) because Microsoft's withdrawal combined with concern about the
economy and the advertising market will weigh on investors.
Yahoo, the second most popular Internet search engine, rose $1.86 to
$28.67 yesterday in Nasdaq Stock Market trading. Microsoft fell 16
cents to $29.24.
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