At a news conference in Germany, Steve Ballmer seems to confirm SVP Jean-Philippe Courtois’s remark last week that Microsoft (MSFT) and Yahoo (YHOO) are in talks. Or at least that’s how we read Steve’s latest remarks (via Reuters). Source close to situation suggests otherwise (see below). Steve also says Microsoft standing pat for now, but is considering “alternatives” (see below).
“We still think the deal makes sense with the price and structure that we announced and we hope that over time that becomes a reality and we’re working towards that,” Steve Ballmer said at a news conference on Monday.
“There’s been a range of dialogue and there’s a range of alternatives being considered. I think it’s best for me not to get into the detail,” Ballmer added at the event in Hanover, Germany, on the eve of CeBIT, Europe’s biggest technology fair.
*UPDATE: Source close to situation thinks Ballmer was referring to a “range of dialogue and range of alternatives” inside Microsoft. In light of Jean-Phillipe controversy last week, though, if this is the case, seems Steve could have chosen words more carefully.
And what might those alternatives be? Here are some possibilities:
- Raise bid (unlikely until 11th hour, after Yahoo formally comes to table)
- Pull bid and pulverize stock (unlikely until Yahoo blows Q1)
- Wait for Q1 results in early April (probably bad) and then re-evaluate offer)
- Proceed with effort to get Yahoo’s board canned (near-certain)
- Make Exchange offer for Yahoo stock, circumventing Jerry, David, et al, and going directly to shareholders. This could be done on current terms or improved terms. If a significant percentage of Yahoo shareholders tendered shares, Yahoo’s board would effectively be forced to rescind the poison pill and approve the deal (or else be forced to argue that Yahoo’s shareholders are too stupid to know what’s in their best interests). This seems a plausible alternative.