Breaking: Microsoft Bids $44.6 Billion For Ailing Yahoo
AP News Alert
REDMOND, Wash. (AP) - Microsoft Corp. offered to buy search engine operator Yahoo Inc. for $44.6 billion in cash and stock in a move to boost its competitive edge in the online services market.
Microsoft bid $31 per share for Yahoo, representing a 62 percent premium to Yahoo’s closing stock price Thursday.
From yesterday’s Financial Times:
Wall Street’s dwindling reserves of patience for seemingly endless efforts to remake Yahoo appeared nearly exhausted on Thursday after the company said it would take even more time – and money – to find a fix.
With some of the company’s few remaining Wall Street supporters heading for the exits, including analysts at Citigroup and Oppenheimer, the shares dropped another 8 per cent. After little more than six months at the helm, Jerry Yang, chief executive officer, is finding the goodwill with which he was greeted is fast drying up.
Microsoft Corp. (MSFT: 32.60, +0.40, +1.24%) has offered to acquire Yahoo (YHOO: 19.18, +0.13, +0.68%) in a cash and stock deal valued at $44.6 billion.
The deal, which, at $31 a share represents a 62 percent premium on Yahoo shares, is an unsolicited offer, coming a year after Yahoo rejected a similar combination.
It would be one of the largest technology acquisitions ever, and comes as older, more established tech giants like Microsoft and Yahoo struggle to the newer threats posed by Google (GOOG: 564.30, +16.03, +2.92%), which dominates the online-search landscape.
“Our lives, our businesses, and even our society have been progressively transformed by the Web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure,” said Ray Ozzie, chief software architect at Microsoft said in a press release announcing the offer. “The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our own.”
Under terms of the offer, Yahoo shareholders would receive cash or a fixed number of shares of Microsoft common stock, with Yahoo shareholders getting one-half cash and one-half Microsoft common stock.
Yahoo officials weren’t immediately available to comment.
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