Yahoo bid: investors may side with Microsoft
Many of Yahoo Inc’s largest shareholders may have a vested interest in Microsoft not being forced to pay too much in any bid for the company, reports Reuters.
According to a report carried out by financial analysts the RiskMetrics Group, almost 90 percent of Yahoo’s top stock holders also have a significant stake in Microsoft.
Many of the investors have substantially more money invested in Microsoft than Yahoo, meaning that a bid in excess of market value would not be in their interests.
The potential deal is on hold after Yahoo executives rejected Microsoft’s initial approach valued at $41.7 billion, claiming that the bid undervalues the search portal.
Although Microsoft have responded to say that the bid was “full and fair” a higher bid is widely expected amid rumours of rival interest from News Corp. and AOL Time Warner, which could force Microsoft into paying more than they had bargained for.
While Yahoo’s share price has soared since news of the bid broke, the market seems to have less confidence in the deal from Microsofts perspective, with their shares down 13 percent since the offer was announced.
“They may be more concerned with whether Microsoft will get caught up in a ‘deal frenzy’ and suffer the ‘winner’s curse’ by overpaying for Yahoo,” commented an analyst from RiskMetrics.
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