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Scott Jagow: The word this morning is that Yahoo! is going to reject Microsoft’s $44-billion offer. Yahoo’s board met over the weekend and made its decision. It’s apparently going to spell out its reasons for spurning Microsoft this morning.
We’re joined by our reporter Lisa Napoli, who covers the tech world for us. Lisa, why do you think Yahoo! is saying no?
Lisa Napoli: Yeah, it seems a little hard to imagine refusing a $44-billion offer. But it turns out that the Yahoo! board of directors say that their stock is undervalued now. They might be wanting $40 a share versus the $31 a share the Microsoft put down on the table.
Jagow: Do we have any idea if Microsoft might be in the mood to do that?
Napoli: Well, that’s the $44-billion question, Scott. It seems like Microsoft really needs Yahoo!, but whether Microsoft is willing to buy this negotiating tactic that Yahoo! seems to be doing very publicly, we’ll have to wait and see.
Jagow: What else might Microsoft do if it didn’t raise its bid? Is there any other option?
Napoli: Steve Ballmer said the other day when he made the offer — he didn’t use the word “hostile takeover” — but he said basically he’d do whatever he had to do to make it possible. That could mean that he would go direct to shareholders and make the offer to them, and avert the board of directors..
Jagow: Well, this bid from Microsoft certainly prompted a reaction from Google. Where do you think Google stands right now?
Napoli: Google has come out and said it will help Yahoo! avoid a takeover by Microsoft. Apparently, earlier this month, Google made an advance to Yahoo!, and they’re one of the very few companies out there who can realistically come with anything close to this $44-billion figure. Google buying Yahoo! is almost impossible to imagine getting through regulators.
Jagow: OK, our reporter Lisa Napoli. Thank you.
Napoli: Thanks, Scott.
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