Ballmer Says Yahoo Deal Would Make Sense Economically

October 16th, 2008 at 12:00 am
 


steve ballmer microsoft ceo

Microsoft’s head honcho said in a conference in Florida this Thursday that he thinks that Microsoft acquiring Yahoo now makes economic sense to both companies’ shareholders.

Yahoo rejected Microsoft unsolicited bid to buy them out last February. At the time, Microsoft was offering $33 per share which valued Yahoo at $47.5 Billion. Yahoo asked for more and Microsoft withdrew the bid. Jerry Yang, CEO of Yahoo and the main reason for the Yahoo rejection promised that keeping Yahoo independent would be better for its shareholders. However, nearly 6 months after the Microsoft-Yahoo deal collapsed, Yahoo’s stock has cracked the $12 barrier, a 60% fall. Yahoo’s stocks opened at about $11 and rose about 9-11% in the afternoon closing at nearly $13 after Ballmer made his comments.

However, Ballmer said that Microsoft has no plans of acquiring Yahoo at the moment. "It’s clear that Yahoo did not want to sell the company. It didn’t want to sell when we offered $33. They probably still think it’s worth at least $33 today."

Analysts are speculating that Ballmer’s comments may have some strategy. Ballmer is "trying to set the stage for a lower valuation" on Yahoo, said Colin Gillis, an analyst with Canaccord Adams in New York. He has a "hold" rating on Yahoo shares, which he doesn’t own. "I hope there’s real strategy behind the comments and they’re not just casual."

Whatever it is, all we are sure of now is that Microsoft and Yahoo have no plans for an acquisition. Yahoo spokesperson Tracy Schmaler declined to comment.