I can’t blame Microsoft (MSFT) for getting a little impatient with the top brass over at Yahoo (YHOO). Now that Microsoft has set a three-week deadline for making some progress (in a letter sent out this weekend), hopefully this whole thing will be concluded shortly.
For some reason, Yahoo seems to think they have leverage here. Their stock was in the teens, their business was deteriorating, they got a $31 per share buyout offer, and yet they are still quacking that MSFT should raise their offer. With no competing bids? Why would Steve Ballmer do that?
Yahoo should be thrilled that Microsoft is so keen on doing a deal. Deals with 60% premiums aren’t really open for renegotiation when there are no other interested parties, and this fact will force Yahoo’s hand.
Yahoo should simply come to the table and tell Microsoft that they’ll agree to sell, but that they will take no less than $31 per share in real economic value (MSFT is offering half stock, so the actual price is below $31 right now). Either MSFT offers 100% cash or they increase the share exchange ratio to ensure Yahoo shareholders actually get $31, not $28 or $29. Come on everyone, let’s get this done already.
Full Disclosure: Long both MSFT and YHOO at the time of writing