After the market closed on Friday, news came out citing sources as saying that Microsoft was considering cutting their $31 a share bid for Yahoo. Yahoo tanked and Microsoft spiked. (See after hours charts below) Personally, as a Microsoft holder, we just wish they'd walk. On Saturday, Microsoft fired a cannon volley at Yahoo, with Steve Balmer sending a letter to the Yahoo directors, effectively drawing a line in the sand:
Microsoft Chief Executive Steve Ballmer in a letter sent to Yahoo directors Saturday threatened a hostile takeover of the company if they don't agree to a merger within the next three weeks. Yahoo planned to issue a rebuttle to Mr. Ballmer's letter early on Monday in which it is expected to reject his suggestion that Yahoo's business is deteriorating, according to people familiar with the matter. The letter will also say that the board is not opposed to doing a deal with Microsoft per se but thinks the software company should pay more.
Yahoo's reluctance to negotiate has given some Microsoft executives a window to voice their opposition to the proposed acquisition, say people familiar with the matter. Their skepticism probably wouldn't derail a possible deal, but it could at least limit Microsoft's appetite for raising its offer, these people say.
Some in Yahoo's camp view Mr. Ballmer's latest move as a negotiating strategy, and they believe there is still time for Yahoo to pursue alternatives to an acquisition by the software giant, say people familiar with the matter. One of the people says some members of Yahoo's management would prefer not to sell to Microsoft and are still looking for another deal that would allow Yahoo to avoid that. The company's directors were scheduled to discuss the matter Sunday, but it wasn't clear whether they came to any new conclusions.
Microsoft Ratchets Up Deal Pressure on Yahoo - Wall Street Journal
Microsoft May Cut Yahoo Bid Amid Slowdown, People Say - Bloomberg
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