From The Associated Press: Microsoft offers $44.6B for Yahoo
Microsoft has made an unsolicited US$44.6 billion offer for Yahoo in a move to boost its competitive edge against Google in the online services market, reports AP. “The unexpected announcement made on Friday comes as Yahoo and Microsoft have fallen behind Google in the race to capture online advertising dollars. The deal could also give lift to the entire technology market,” The Associated Press notes. “In a letter to Yahoo’s board of directors, Microsoft Chief Executive Steve Ballmer said the company will bid $31 per share, representing a 62 percent premium to Yahoo’s closing stock price Thursday.” Under terms of the proposed deal, Yahoo shareholders could choose to receive cash or Microsoft common shares, with the total purchase consisting of 50 percent each cash and stock.
Google stock was down $51 on the news. Yowch! Even if the deal doesn't go through Microsoft just lopped almost a 2 billion in value from stockholders.
In a letter to Yahoo executives:
"We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected ..."
"While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo that we are proposing,"
Microsoft's press release provides more details:
“Our lives, our businesses, and even our society have been progressively transformed by the Web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure,” said Ray Ozzie, chief software architect at Microsoft. “The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our own.”