The “$31” bid Microsoft (MSFT) made for Yahoo (YHOO) that Yahoo rejected as “significantly undervaluing” the company? Ancient history. Now the bid value is down to $28.40, a new low.
Now that Yahoo has rejected the bid, the question many Yahoo shareholders are asking is, “Where is the stock going to trade if Microsoft, gasp, pulls the bid?” Answer? Probably $17-$18.
SAI’s Microsost-Yahoo Bid Calculator
With every uptick or downtick in Microsoft’s stock price, the value of its Yahoo bid changes. That’s why we created the SAI MSFT-YHOO Bid Calculator!
Here’s a reminder of the deal terms:
Microsoft has offered to buy Yahoo for a 50/50 cash/stock deal composed of $31 of cash and 0.9509 Microsoft shares per Yahoo share. Thus far, as Microsoft investors express their distaste for the deal, Microsoft’s stock has mostly tanked–and the value of its Yahoo bid has dropped.
Unless Microsoft adjusts the exchange rate (which will result in more dilution to Microsoft shareholders) or changes the percentage of cash compensation (which will result in higher debt and interest payments), the current value of the offer for Yahoo shareholders will change. The current value is here. (We’ve set the spreadsheet to update automatically every few minutes.)