After the deadline passed last weekend for Yahoo to accept Microsoft’s takeover bid, many were left wondering what Microsoft would do next. This week, Microsoft has indicated that they are willing to raise their bid to as much as $33 per share, in an attempt to avoid a controversial proxy bid and hostile takeover that the company has threatened.
Microsoft held a board meeting on Wednesday, and according to the WSJ, sources familiar with the matter indicated that the directors gave Steve Ballmer broad discretion to either go hostile or abandon Yahoo altogether, but also said that the final decision was a toss-up at the meeting. In other words, we still don’t know what Ballmer and Microsoft will decide, but sources have said that Ballmer should reveal his decision later this week.
If Microsoft is indeed willing to raise its price to $33 as they’ve suggested, would that even be enough to appease Yahoo shareholders? Many shareholders, as well as Yahoo management, have indicated that they’re holding out for something in the higher 30’s, in the $35 to $37 per share range. That may mean that Yahoo has just three choices: up their bid, walk away, or fight it in a proxy contest.