So instead of launching a proxy fight after passing its self-imposed deadline, Microsoft did the smart thing and tried to show Yahoo some love, so says the latest leak-story in the Wall Street Journal.
Last night, the Journal published a report saying that “Microsoft this week indicated a willingness to raise its bid to as much as $33 per Yahoo share, attempting to avoid the hostile takeover battle Mr. Ballmer had threatened, according to people with knowledge of the situation.”
The problem? Yahoo’s major shareholders “have signaled they want in the range of $35 to $37 a share,” while “Yahoo’s management and board similarly shooting for an offer in the upper 30s, say people familiar with the matter.”
My bet: There’s no way Microsoft is going to push its bid into the high 30s. This deal gets done at $34 or $35, just as I have said all along. That allows Microsoft to save some face, and Yahoo to feel like it didn’t roll over. Yahoo’s quarter was good enough, and the prospect of a drawn-out proxy battle is so unappealing, that Steve Ballmer is likely to bump up his offer just a tad more to close the deal. Yahoo needs to get the deal done because if it doesn’t, its stock would plummet, drawing a raft of distracting shareholder lawsuits.