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More suitors for Yahoo tip up

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posted on Feb, 5 2008 @ 12:22 PM
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"JUST when you thought the Yahoo deal could not get more silly, Apple and Rupert Murdoch's News International are apparently thinking of matching Microsoft's bid for the search outfit"


Source



"Yahoo CEO and co-founder Jerry Yang is desperately trying to get a coalition of the willing to see off the Microsoft threat. Apparently he does not like Vole much and would not like to see his company submerged into the Volish Empire at any price."


Looks like Yahoo does not want to be part of M$.

Save for a "Poison Pill" action, can't M$ just buy up a majority of the stock



Poison pill" is sometimes used more broadly to describe other types of takeover defenses that involve the target taking some action that harms both target and bidder, although the broad category of takeover defenses is more commonly known as "shark repellents" and includes the traditional shareholder rights plan poison pill.

Source

Here are some examples of "poison pill" actions:


"# The target adds to its charter a provision which gives the current shareholders the right to sell their shares to the acquirer at an increased price (usually 100% above recent average share price), if the acquirer's share of the company reaches a critical limit (usually one third). This kind of poison pill cannot stop a determined acquirer but ensures a high price for the company.
# The target takes on large debts in an effort to make the debt load too high to be attractive - the acquirer would eventually have to pay the debts.
# The company buys a number of smaller companies using a stock swap, diluting the value of the target's stock.
# The target grants its employees stock options that immediately vest if the company is taken over. This is intended to give employees an incentive to continue working for the target company at least until a merger is completed instead of looking for a new job as soon as takeover discussions begin. However, with the release of the "golden handcuffs", many discontented employees may quit immediately after they've cashed in their stock options. This poison pill may create an exodus of talented employees. In many high-tech businesses, attrition of talented human resources often means an empty shell is left behind for the new owner.
# Peoplesoft guaranteed its customers in June 2003 that if it were acquired within two years, presumably by its rival Oracle Corporation, and product support were reduced within four years, its customers would receive a refund of between two and five times the fees they had paid for their Peoplesoft software licenses. The hypothetical cost to Oracle was valued at as much as US$1.5 billion. The move was opposed by some Peoplesoft shareholders who believed the refund guarantee flagrantly opposed their interests as shareholders. Peoplesoft allowed the guarantee to expire in April 2004.
# The practice of having staggered elections for the Board of Directors. For example, if a company had nine directors, then three directors would be up for re-election each year, with a three-year term. This would present a potential acquirer with the position of having a hostile board for at least a year after the first election. In some companies, certain percentages of the board (33%) may be enough to block key decisions (such as a full merger agreement or major asset sale), so an acquirer may not be able to close an acquisition for years after having purchased a majority of the target's stock"

Source

[Mod Edit] Don't copy and paste entire pieces of content from other websites.

[edit on 5-2-2008 by MemoryShock]

[edit on 5-2-2008 by MemoryShock]




posted on Feb, 5 2008 @ 12:33 PM
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Good background on the poison pill, mrmonsoon. Please add more of your own thoughts in the future....what would do think this means, etc.



posted on Feb, 5 2008 @ 12:57 PM
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My point was that Yahoo does NOT have to be purchased by M$, if they don't want to.

It "was" my understanding that the offer( M$) was some 40-50% above current stock prices for yahoo shares.

This means it's not like people will not good value for their stock-at least imo.

I wonder what the REAL reasons were, discussed behind closed doors.

I am sorry, I don't think the corporate board really cares that much about it's employee's and they would get a nice value for their stock.

What will the reasons be, if the deal does not go through????

On second thought, the money is good as they are considering the same offer from different investors.

Hmmmmmmmmm.



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