Behind the veil of polite press releases, Microsoft and Yahoo continue to negotiate through the media. In today’s NY Post, Team Microsoft sources scoff at Yahoo’s $40 counter-offer, dismissing it as “absurdly high,” but allow that Steve Ballmer is willing to go higher than the $31 that is already on the table. Based on Yahoo’s $40 counter and Microsoft’s previous willingness to pay $35, both sides appear to be converging on a sale price of $35-$36.
Meanwhile, Team Microsoft also adds a stick to its carrot, making known through the Post that Microsoft has hired proxy solicitation firm Innisfree in preparation for a proxy fight. Right now, Innisfree’s role is information-gathering–calling Yahoo shareholders to gauge their support for the deal. If Microsoft goes fully hostile, however, Innisfree would campaign for votes for Microsoft’s slate of directors.
Trying to get Yahoo’s board fired would be a last resort for Microsoft. But as the two parties spar behind the scenes, it has to act as though it’s fully prepared to go that route. The Post–the medium for last week’s Capital Research-Steve Ballmer meeting–also helpfully points out that some of Yahoo’s big shareholders are itching for a deal:
[S]ome of Yahoo!’s biggest investors seem to be stacking up against Yahoo! CEO Jerry Yang’s refusal to sell the company.
Mutual fund giant T. Rowe Price, which owns 18 million shares of Yahoo! said yesterday that it would be “very vocal” if Microsoft raises its offer and Yahoo! rejects it again.
Capital Research and Management, Yahoo!’s largest investor with a recently raised stake of 11.6 per cent, is said to favour a deal as well.
Henry Blodget discusses the unofficial negotiating through the press on Yahoo!’s TechTicker:
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.