|
New York: Microsoft, the world's largest software maker, may have opened the door to price negotiations with Yahoo after the two companies met last week, making a deal more likely.
The software maker sent executives to talk with Yahoo officials on March 10, their first meeting since Yahoo rejected a $44.6 billion takeover bid, according to a person familiar with the situation, who refused to be identified because the talks are private.
The discussions may signal a thawing of relations between the companies and may make Microsoft more willing to pay "a couple dollars more" than the original $31 a share offer, Morningstar analyst Toan Tran said in an interview.
Microsoft's other option is to nominate a slate of directors to dominate Yahoo's board.
"Yahoo's definitely softened its stance in engaging in these informal talks," said Chicago-based Tran, who recommends buying Microsoft stock and doesn't cover Yahoo. He doesn't own shares in either company. "Previously, Yahoo wouldn't even come to the table with Microsoft."
Yahoo rejected Micro-soft's offer on February 11, 10 days after the bid, saying it undervalued the company. Yahoo, owner of the most visited group of websites in the US, said last month that the online advertising market will grow to $75 billion by 2010.
Yahoo spokeswoman Tracy Schmaler declined to comment. Microsoft spokesman Frank Shaw didn't return a message.
Microsoft said after the rejection that it reserves the right to take any steps needed to get its offer before Yahoo shareholders. Buying Yahoo would give the company second place in the internet-search market in the US. Google's share is almost 60 per cent, according to the latest report from ComScore.
Yahoo engaged in talks with Rupert Murdoch's News Corp. about a combination to block the Micro-soft bid, a person with knowledge of the discussions told Bloomberg News last month.
Market: Shares plunge
Yahoo fell 79 cents to $26.71 on Friday in Nasdaq Stock Market trading, while Microsoft dropped 66 cents to $27.96.
Yahoo traded at a 7.2 per cent discount to the current $28.79 value of Microsoft's cash and stock offer, compared with a 5.5 per cent discount on Friday.
|
