Yahoo’s Stock Declining (Don’t Look at the Big Board!)
ADOTAS — Influential Legg Mason stock-picker Bill Miller told The Wall Street Journal that his firm is prepared to support an independent Yahoo if Microsoft follows through with its threat and lowers its unsolicited takeover bid. But the initial blast of sunshine may be overshadowed by some key caveats.
Miller went so far as to say that Microsoft’s Steve Ballmer “blundered” when he issued a public missive threatening a proxy war and a lower price if Yahoo didn’t step up to the plate and play ball.
“Telling the shareholders you’re going to take something away from them is not a way to get their support,” Miller told the Journal.
(Yahoo’s Jerry Yang and chairman Roy Bostock responded to Ballmer’s note with a public letter of their own on Monday, saying that Yahoo will not accept Microsoft’s current offer because it does not “fully reflect” its value and accepting the offer would be a disservice to stockholders.)
The last time Miller piped up publicly about the deal was on February 10 – the day before Yahoo officially rejected Microsoft’s bid – when he told investors in a quarterly letter that Yahoo should get about $40 a share, significantly more than Microsoft’s original $31-per-share offer.
However, Miller also told the Journal that if Microsoft raises its offer, “the pressure shifts very quickly to Yahoo to negotiate.” Even more ominously (for Yahoo), Miller lowered his estimate of what Yahoo should reasonably expect to get for its shares. “To me, bumping the number up a buck, that would have a big impact psychologically on shareholders.”
From $40 to $32?
Looks like Yahoo’s stock is declining – despite what the big board would have you believe — even in the eyes of its biggest boosters.
Since the bid was announced, Yahoo’s stock has officially risen (from $19.18 to about $27.54 today) and Microsoft’s has slumped (from $32.60 to about $28.62 today) – effectively lowering the cash-and-stock deal.
Legg Mason is the Yahoo’s second-largest shareholder.
In other news, Yahoo announced that it has entered an agreement to acquire the assets of Tensa Kft. – more commonly known as IndexTools, a Web analytics software provider for online marketing.
“Yahoo believes that the ability to generate the most valuable and relevant insights is essential to seizing market opportunities and creating successful campaigns,” said Bassel Ojjeh, senior vice president and head of Yahoo’s Strategic Data Solutions group, in a release. “We expect that the IndexTools’ technology platform will provide our customers the opportunity to more quickly uncover and act on these insights, enhancing Yahoo!’s status as a partner of choice in online marketing and the must buy for the world’s advertisers.”
The technology is expected to extend Yahoo’s current analytics offerings by adding capabilities to deliver relevant insights and metrics for online campaigns across Yahoo’s network, the company said.
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