Investor proposes Microsoft Buy Yahoo for $22 per Share

October 10th, 2008 at 12:00 am
 


mithras capital yahoo microsoft investment shares stock financial crisis acquisition

The fire on Wall Street is making tech companies on the west coast a bit jittery.  Actually, it’s not the tech companies who are worried but their investors.  In a recent press release, Mithras Capital, a Yahoo investor proposed that Microsoft buy out Yahoo (again) at $22 a share.

The Microsoft-Yahoo or Microhoo issue has been dead since August.  Yahoo rejected Microsoft’s offer at $34 a share and took Google’s search and ad deal while Icahn got three seats on the board. Nonetheless, times have changed and Yahoo’s stock has gone to five year lows closing at $12 a share this week.   Meaning this is all a different ball game.

According to the proposal, Microsoft will be paying $2billion dollars less than what they offered last July.  Moreover,  in the event that Microsoft does agree to the proposal, they’ll be buying Yahoo’s search business for only $10.3 billion.

"As Yahoo shares decline and Microsoft struggles in its online services business, it is increasingly likely Microsoft will make a new offer," American Technology Research analyst Rob Sanderson wrote in a note to clients on Wednesday.

"It is imperative for Microsoft to act now, while the Yahoo-Google deal is mired in regulatory concerns, and before Yahoo strikes a deal with AOL," said Mark Nelson, a partner at Mithras.  He continues in a news release, "It is imperative for the Yahoo board to embrace this proposal as the best outcome for long-suffering Yahoo shareholders." [Reuters]