SAN FRANCISCO — After being rebuffed Monday by Yahoo, Microsoft fired back by saying it planned to move quickly and by whatever means necessary to clinch the deal to buy the company.
It did not elaborate on what steps it planned to take but called its $44.6 billion offer “full and fair.” Analysts have said Microsoft could sweeten its offer, nominate its own slate of directors to Yahoo’s board or tender the offer directly to shareholders.
Microsoft said investors, consumers and advertisers would benefit from combining the companies, creating a formidable No. 2 competitor to Google in Internet search and online advertising.
Yahoo shares gained 67 cents, 2.3 percent, to $29.87. Microsoft shares dipped 35 cents, 1.2 percent, to $28.21.
Sunnyvale, Calif.-based Yahoo said Microsoft’s bid “substantially undervalues” the Internet pioneer.
“There is a clear path to a higher offer,” said Ken Marlin, managing partner of Marlin & Associates, a technology-focused investment bank. “The board knows it and is already engaged in the elaborate kabuki dance to get there. They will.”
Redmond, Wash.-based Microsoft could sweeten its half-cash, half-stock offer and pay $35 to $40 a share for Yahoo, analysts say. Another option: Microsoft could take its offer directly to shareholders.
Microsoft would like to avoid a hostile takeover to avoid alienating Yahoo employees and to increase the chance of clearing regulatory hurdles, analysts say. But in Microsoft’s offer letter, chief executive Steve Ballmer implied that the company would be willing to turn the bid hostile.
“Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo’s shareholders are provided with the opportunity to realize the value inherent in our proposal,” Ballmer wrote.
The rejection could set the stage for a battle, with Yahoo pushing for $40 a share. At least one group of shareholders will be pushing for a quicker resolution.
