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Microsoft has made an official proposal to acquire Yahoo in a deal worth $44.6 billion in cash and stock, at a price of $31 per share, which represents a 62 percent premium for shareholders.
Here's a quote from the official press release:
"Microsoft Corp. (NASDAQ:MSFT) today announced that it has made a proposal to the Yahoo! Inc. (NASDAQ:YHOO) Board of Directors to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 billion. Microsoft’s proposal would allow the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half Microsoft common stock. The offer represents a 62 percent premium above the closing price of Yahoo! common stock on Jan. 31, 2008."
Microsoft's CEO, Steve Ballmer says:
“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market. We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners.”
Yahoo hasn't yet commented on the offer, but I'm damn sure they're seriously mulling it over. The cold harsh truth that Google is beating both companies in too many fields will definitely be a factor in this one.
This, of course, is not the first time such an offer was made. In May 2007 when the rumors first surfaced, even the valuation was pretty close: 50 billion. 8 months later, and Google has been doing quite well. Yahoo? Not that well. Draw your own conclusions, and let us know: what do you think of the deal? Is it a good idea, and does Microhoo stand a chance against the big G?
Update: Yahoo now has an official, if not very revealing, response to what they call an "unsolicited proposal from Microsoft." The complete text of the response is as follows: