Microsoft Offered $40 a Share For Yahoo

fistfullast33l writes "Bloomberg is reporting that a recently unsealed court case by shareholders against Yahoo reveals that Microsoft offered $40 a share for the Internet search company in January 2007 and Yahoo turned it down. We've extensively discussed Microsoft's bid for Yahoo earlier this year for $33 a share, which was rebuffed. Investor Carl Icahn has launched a proxy fight against Yahoo over the spurning of the Microsoft deal." CWmike notes Computerworld's coverage of the revelations: "The complaint places much of the blame on [Yahoo CEO Jerry] Yang, describing him as someone with a 'well-known' antipathy toward Microsoft who acted out of a personal interest to keep Yahoo independent. Something wrong with that? Oh, yeah... public company."

Re:Public companies

[Dachannien]

Actually, 82% of Yahoo's float is held by institutions and mutual funds [yahoo.com].

Re:Jerry Yang did the right thing

[m0rph3us0]

Jerry Yang's job isn't to do whats good for Yahoo, it's to do whats good for the share holders. Maybe you forget that they are the people who actually own the company. Yang needs to demonstrate how Yahoo will deliver more than double its January value to it's shareholders.

That's part of the deal for taking public money, if you don't like the deal don't take the money.

Re:Public companies

[Anonymous Coward]

Actually, what you're referring to is the "business judgment rule," which says that the Board's business judgment will not be challenged in court absent a showing of bad faith or being on both sides of a transaction. The Board is *required* to focus on maximizing wealth for the company's owners, i.e., the shareholders. However, under the "business judgment rule," the Board may be able to justify its decision to refuse a higher tender offer in that it better understands the long-term business implications of the company and thinks that not selling will be better off in the long run for shareholders.

Re:No

[alexhard]

Actually profits don't play into it at all. The simply reason for that is that profit doesn't take into account the opportunity cost and time value of capital. He really does have to maximise shareholder value.

Re:Right thing for employees.

[umofomia]

Painting this to be a personal thing by Yang is nuts. Yahoo and M$ were getting along famously until M$ decided to launch a hostile takeover.

Microsoft never launched a hostile takeover. A hostile takeover means bringing the offer to the shareholders directly, which they never did. All Microsoft did was bring their offer to Yahoo's board, which is what any other company would do if they were interested in buying them. Apparently this latest news indicates that Yang decided to not even negotiate. Though there were rumors that Microsoft might go hostile after the board negotiations broke down, it never happened.

Re:'shareholders'

[OakLEE]

unfortunately they are the most damaging factor for the vision and progress of any company.

Really?

Shareholders give companies money to expand, grow, and operate. More over they do it during times when the company cannot raise money through bank or debt issuances. In fact the restrictions a company takes on when taking out a loan are often much more onerous then the messiest of shareholder revolts.

Have you ever tried to start up a business? Do it, and try to get a loan before you've even set up shop. You'll be laughed out of almost every bank you go to, and if you do get a loan you'll probably be paying 500 basis points (5%) over prime. It's much less onerous to give up some control of your company to outside shareholders for their cash. At least then you don't have the exorbitant interest charges (and other potential restrictions) that come with taking out a loan.

Now specifically about Yahoo, Yahoo did not have to offer its stock publicly. If Jerry Yang wanted to run Yahoo like his personal dominion he didn't have to sell 2.6 million shares to the public in 1996 (plus the countless other secondary offerings Yahoo made). He could have retained control, but he chose take the shareholder's money and the many headaches that came along with it.

Re:The pulse of the cube farm

[petermgreen]

That is true but provided you are sensible windows isn't all that expensive.

Per thier support lifecycle policy MS says they will offer security updates for at least 7 years after the release of the next version.

What that means is as long as you buy the latest version OEM (you can use downgrade rights if you don't want to run the new version yet) the PC will almost certainly have been retired before the version of windows it shipped with

Some companies end up paying a bit more (exactly how much more is hard to tell because details of volume license prices don't seem easy to find online) for windows because they want the extra flexibility volume licensing gives them (yes there are reimage rights but they are relatively restricted) but even then windows will be a pretty small proportion of the TCO of the machine.

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[account_deleted]

Comment removed based on user account deletion

Re:It's like watching ugly people kiss

[Kalriath]

With Google, you get a simple, fast loading homepage with only a few links, a search box and the Google logo

You mean something like this [yahoo.com]?

Re:Jerry Yang did the right thing for the COMPANY

[mark2003]

There is a name for this - it is called the agent-principle problem. The principles of the company are the shareholders, or if it is in financial distress, the debt holders. They own the company. The managers of the company are the agents and they are supposed to act in the best interests of the principles. This means that they should be returning maximum value to the share holders, either through paying out cash or investing it to create value (growth is not the same thing as value, with a negative ROIC it can lose money).

You may not like this but it is the deal the Yang made when he IPO'd Yahoo! If he wanted to remain in control he should have kept the company private. This is management hubris pure and simple. If I was a shareholder of Yahoo! then I would sue as well.