Yahoo Hoping For $22/Share Buyout From Microsoft

    October 10, 2008


There’s no doubt that the current economic meltdown is hurting a lot of businesses. At the sharp end of the Wall Street collapse is Yahoo–its stock is down 34% since the beginning of August.

With its partnership with Google destined to be delayed for eternity, some Yahoo investors are hoping Microsoft might be willing to catch a falling knife. Actually, they’re kind of hoping that Microsoft will look past Yahoo’s $12 share price and be generous with a $22 buyout offer.

A small Yahoo Inc investor proposed a new deal on Thursday to sell the company to Microsoft Corp for $22 a share, a 74 percent premium to the Web pioneer’s current stock price.

Under the proposal by investment fund Mithras Capital, Microsoft would unload Yahoo’s Asian assets and non-search businesses, extract $3 billion worth of cost savings and receive $2.8 billion of tax benefits, meaning the software giant would pay $10.3 billion for Yahoo’s search business.

Mithras Capital, which owns more than 1.9 million shares, or 0.14 percent, of Yahoo, said in a press release that the proposal allows Microsoft to buy Yahoo’s search business for $2 billion less than it offered in July.

The Government is watching this potential deal closely. If it goes ahead, it’s hoping Microsoft will also take its newly acquired $700 billion debt of its hands for $1 trillion. ;-)