Wow! (Which apparently has been the reaction all over the blogosphere.) Microsoft (MSFT) just made a bid to purchase Yahoo! (YHOO) at $31/share, or about $44.6 billion in cash and stock.
This has been in the rumor mill for some time now, once even jumping the price of YHOO to around $33. Now that Microsoft has made a public bid, the price has been hovering between $27-29. Some analysts expect that this is only the first bid by Microsoft, and that they may raise their bid $3-4 to sweeten the deal.
“It’s unusual to put your best bid out the first time,” said Tom Burnett, the Director of Research for the merger research firm Wall Street Access. He also added that the possibility of a Democrat winning the US presidential election could make the acquisition tricky. “A lot of this is driven by the political impact of the Dems going into the White House, and being more vigorous. The Dems have a history of being more aggressive and anti-big business.” This means Microsoft may have to sweeten the deal soon.
Oh, and here’s an interesting take on Microsoft’s bid, by Peter Van Dijck (found via the comments of A VC). Danny Sullivan of Search Engine Land also has a good analysis of the bid, including a mention of Yahoo!’s response: “[The] Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.”
This could be a real historical moment, at least in the Internet world. Wow indeed!
