Yahoo, Microsoft: standby

Di   27 Aprile 2008
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The two companies and their advisers have been talking in recent weeks, but achieved no breakthroughs that would lead them to a friendly deal by Saturday, said people familiar with the matter. That’s the day Microsoft Chief Executive Steve Ballmer has set as a deadline for Yahoo to reach a friendly deal before Microsoft goes hostile, threatening to lower the price in that case.

The people familiar with the matter said that, as of late Friday, no meetings between the two companies were planned for the weekend and they were skeptical that any friendly accord could be reached before Monday.

The issue of price has been a main sticking point, with Microsoft’s cash-and-stock offer valued at $29.68 a share as of Friday’s market close. Yahoo’s directors have rejected the offer as undervaluing the company, and major Yahoo holders have signaled they want closer to $35 a share.

Yahoo has been waiting for a higher offer from Microsoft to bring to its directors for a vote, but Microsoft hasn’t extended one, said people familiar with the matter. For their part, Microsoft executives have been frustrated by what they perceive as Yahoo’s refusal to engage in discussions about a reasonable price, said people familiar with the matter. Yahoo has signaled that it expects a significant boost in Microsoft’s bid, whereas Microsoft has been willing to entertain only a moderate increase, the people said.

A central question is whether Microsoft might raise its offer this weekend to try to spur a friendly deal. Mr. Ballmer, in Madrid on Friday, reiterated that his company didn’t see a reason to raise the price.