Microsoft Corp has given Yahoo Inc. a three week deadline to accept a $31-a-share offer or it will take their bid directly to the shareholders. The Microsoft bid to buy Yahoo is valued at more than $40 billion and would mark the largest takeover in the high-tech industry.
Yahoo inc. had declined Microsoft's original offer, saying the bid undervalued it’s true worth. Microsoft argues the economy and the market for Internet stocks have declined and that Yahoo's share of Web search and advertising business has also declined and referred to industry market reports. In addition, a Yahoo investor said the deal with Microsoft involved regulatory risks that would reduce a merger's potential value.
The board of directors at Yahoo has adopted a strategy that would make a merger with Microsoft more costly. For example, Yahoo has provided a severance plan to all employees if the company was sold that is commonly known as a “golden parachute.”
In conclusion, the acquisition of Yahoo Inc. by Microsoft Corp is heightened by tensions of market risk and perceived value by both parties involved. The time sensitive acquisition proposal by Microsoft Corp for Yahoo Inc. is underlined by the declining value of the market for internet stocks. In addition, adopted strategies by the Yahoo board of directors have made the proposed acquisition a costly objective to achieve.
http://www.msnbc.msn.com/id/23958838/
http://www.bloomberg.com/apps/news?pid=20601103&sid=adbTBkawpo9I
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