Phew. Amid the flurry of last-minute negotiating messages Microsoft (MSFT) sent to Yahoo (YHOO) through the press yesterday, we didn’t see the mention of the tactic we consider Microsoft’s most likely move–but now we do! Peter Lauria and Zachery Kouwe at The New York Post report that Microsoft will likely tell Yahoo behind the scenes that it will raise its bid if Yahoo agrees to negotiate:
Of course, no one believes that Ballmer is actually prepared to “go forward without a merger,” particularly since he has repeatedly stated publicly that buying Yahoo! is the surest way to achieve Microsoft’s goal of 30 per cent market share in search advertising.
Sources said that Ballmer is more likely to reach out to Yahoo! through back channels with a slightly sweetened offer provided Yang and the board agree to begin formal deal discussions. Barring that, and absent a deal by Microsoft’s self-imposed Saturday deadline to go hostile, Ballmer will likely move forward with his plan to unseat Yahoo!’s directors.
So there you have it. Microsoft is:
- Threatening to walk
- Preparing for a proxy fight
- Thinking of quietly raising its bid
Our money is still on the latter, at least as a first move. And if that one fails, we think the possibility that Microsoft may walk is higher than most people do.
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