I think MSFT has already won

by Mathew on February 1, 2008 · 12 comments

Henry Blodget of Silicon Alley Insider says that he has heard rumours of at least one and possibly two other bidders who had offers all ready to go for Yahoo before Microsoft jumped in and spoiled the party, and Paul Kedrosky says he has also heard such talk — supposedly private equity groups, likely out of New York, looking to take advantage of Yahoo’s depressed stock price to launch a takeover and then pay for it by selling off bits and pieces.

Update: News Corp. may also be considering a bid of some kind, Mike Arrington reports.

Regardless of whether there are other bidders or not, I don’t see how they can afford to top Microsoft’s offer. Sure, they could probably raise the money to boost their bid, but would it be worth it? The fact is that Yahoo is worth more to Microsoft than it is to anyone else — Microsoft can justify paying a much higher price because it will (theoretically at least) get enough in the way of synergies out of the deal to make it worthwhile.

How is a private equity bidder going to justify a 62-per-cent premium? There just isn’t that much value in Yahoo for anyone else, IMHO.

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