A consortium of folks interested in buying Yahoo is keeping the public apprised of its plans, which now include using Microsoft’s gigantic cash hoard to help fund the purchase price.
Specifically, report Anupreeta Das and Gina Chon of the WSJ, private-equity firms Silver Lake and the Canada Pension Plan may team up with Microsoft to buy Yahoo.
Microsoft would provide billions of dollars from its gigantic cash hoard and get preferred stock, which would reduce its risk and, possibly, give it some control over the company. Silver Lake and the Canada Pension Plan, meanwhile, would get common stock. And banks would provide the rest of the money in the form of loans.
One goal of these frequent public briefings from Yahoo’s suitors, it seems, is to keep talking down the price the consortium will have to pay for the company.
A couple of days ago, the WSJ reported that Yahoo’s private equity suitors thought the company would go for $16-$18 a share.
Today, the WSJ’s sources familiar with the matter said even $16 was too much.
The thinking behind these frequent public price updates, presumably, is to condition Yahoo’s shareholders to expect very little…in the hope that they’ll eventually take very little.
And how do Yahoo’s shareholders feel about that?
One shareholder we talked to, Michael Hourigan of Thompson Peak Capital, thinks it’s laughable.
Hourigan thinks that Yahoo should go for $25 a share and that anything under $20 is “theft.”
So it seems like the Yahoo bid-ask spread, as it were, is about $16-$25.
So why don’t we just call it $21 and save ourselves a few more weeks of negotiating?
In any event, we see no reason why Yahoo’s private-equity suitors should have a monopoly on trying to negotiate and price-condition in the press. So we hereby volunteer to publish frequent updates on the prices that Yahoo shareholders would like for their stock.
(And I’ll start with myself, seeing as how I have been a miserable and clobbered Yahoo shareholder for more than 13 years. I would like at least $25 for my shares. And I’m going to scream bloody murder if the board sells the company for anything below $20).
UPDATE: And now Google has announced that it wants to get a piece of Yahoo, too. Good luck getting that one through the regulators.
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