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Investor: MS 'blundered' in threats towards Yahoo

updated 12:40 pm EDT, Wed April 9, 2008

MS Yahoo threat a blunder?

Microsoft "blundered" this weekend when it threatened to underbid in a hostile takeover of Yahoo, according to one of the latter company's major shareholders. Bill Miller, the portfolio manager for Legg Mason, states that his company is ready to back Yahoo's desire to stay independent, which is aided by its 7 percent control. This makes Legg Mason the second most powerful shareholder for Yahoo, behind only Capital Research & Management.

Miller says that he already dislikes Microsoft's current offer, which is hovering around the $29-per-share mark, and was originally valued at $31 per share. He notes that when companies attempt hostile takeovers they traditionally raise their bids over the initial offer, rather than keeping them static, or hinting at paying even less than initially promised.

More importantly, Miller comments, Microsoft could easily win the support of Yahoo shareholders if it went in the opposite direction. "If Microsoft raises the offer, the pressure shifts very quickly to Yahoo to negotiate," he said. "To me, bumping the number up a buck [from $31 a share], that would have a big impact psychologically on shareholders."

The Wall Street Journal reports that while Microsoft is resistant to increasing an offer before Yahoo surrenders to negotiations, it may not have to. Analysts from Piper Jaffary say that a majority of institutional investors would rather have the original Microsoft deal than none at all, which could translate into replacements for Yahoo's current board of directors.

by MacNN Staff



  1. jhawk95

    Joined: Dec 1969


    Did he stutter?

    Did he really say that word for word twice? Does he stutter? Can you even stutter a complete sentence?

    Where are the editors at Electronista? I have a Journalism degree from the University of Kansas if you need an editor.

    Go Jayhawks! 2008 National Champions!

  1. rtbarry

    Joined: Dec 1969


    wow. some seriously...

    ...deep analysis there, buddy.

    "Shareholders would warm up to gobs more money."

    How much does that chump make as a portfolio manager?

  1. ZinkDifferent

    Joined: Dec 1969



    Not really analyising much there, I think he was more asked about his opinion - and being a Yahoo shareholder, his opinion certainly is valid.

    As it stands, this just further shows Ballmer's business acumen (read: none), and that he really hasn't evolved from the fatty schoolyard bully that he must have been at one point in his life.

    Personally, I really wish they would go through with the Yahoo acquisition, as it would become a fiasco to rival the AOL/Time Warner merger, and stands a good chance of costing Ballmer his job.

    Of course, on the other hand, I certainly don't want Ballmer to lose his job, but to keep steering the Good Ship Microsoft the way he's been doing for a long, long time... (well, or until it sinks....)

    It's almost like watching a trainwreck in slow motion, where everyone knows the outcome, but everyone's gotta look.

  1. mgpalma

    Joined: Dec 1969


    re: train-wreck

    "It's almost like watching a trainwreck in slow motion, where everyone knows the outcome, but everyone's gotta look."


    It's like the movie Premonition. You KNOW how the story is going to end, but you watch any way.

  1. climacs

    Joined: Dec 1969


    told ya so

    ROTFLMAO! What this guy Miller said, is exactly what I commented when Ballmer's ridiculous threat re: lowering the bid came out. The buyer doesn't bid down to convince the seller; he bids UP!

    Just more bluster and bullying from Ballmer; what's he going to do if Yahoo calls his bluff? Is he really going to insult shareholders by offering LESS? Or maybe he'll do an about-face and offer more after all... and throw away what remaining credibility he has left.

    I hesitate to call big shots like Ballmer 'idiots' because - with the exception of the current White House occupant - you don't get to that kind of position by being an idiot.

    But, it looks like I really am smarter than a Microsoft CEO, and so is a fifth-grader.

  1. ZinkDifferent

    Joined: Dec 1969



    > I hesitate to call big shots like Ballmer 'idiots' > because - with the exception of the current White > House occupant - you don't get to that kind > of position by being an idiot.

    There's also the incompetent idiot that picks his friends well, and rides their coat tails to the top - to be picked when they move on.

    I just described Mr. Ballmer.

  1. Monde

    Joined: Dec 1969


    ballmer sucks

    In every capacity known to man and technology. I wish him a long tenure at MS, he should live 100 more years, so that the Mac can continue to flourish like it has.

    Ballmer is good for 5% Mac market share growth per year. So with this in mind...

    MS-Keep Ballmer! No one can do it like he can! You're in good hands with the Ball-man.

    Think they'll believe me?

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