Yahoo shares fall after Ballmer says no new Microsoft bid – MarketWatch
Posted on: November 9, 2008
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Yahoo12.20, -1.76, -12.6%) shares closed more than 12% lower after Dow Jones Newswires reported that Ballmer told a business group in Australia that Microsoft (MSFT:
Microsoft Corporation had “moved on” and was not thinking about making another bid for Yahoo.
“We are not interested in going back and re-looking at an acquisition,” Ballmer said in Sydney. “We made an offer, we made another offer — it was clear Yahoo didn’t want to sell the business, and we moved on.”
However, analyst Sandeep Aggarwal of Collins Stewart said he thinks the market “is overreacting to Steve Ballmer’s comments,” while noting that Ballmer also mentioned that some sort of combination with Yahoo’s search business remains possible.
“I’m sure there are still opportunities for some kind of partnership on search,” Ballmer was quoted as saying in the report.
Aggarwal said in a note to clients that Ballmer’s remarks are “providing clear endorsement that Microsoft is still very interested in [a] search only deal.”
“We have been consistently highlighting that Microsoft will very likely come back, but for a search only deal and we stand by our thesis,” Aggarwal said.
Analyst Roger Kay of Endpoint Technologies Associates said Microsoft’s reluctance to negotiate is not surprising.
“Yahoo is such a damaged property by now, and no one wants to do business with Yang, who has proven fairly treacherous in negotiations and no wants to waste their breath,” he said. “Yahoo does have a value … but much less than what Microsoft offered before. I can’t see them coming to terms.”
But, he said, Microsoft and Ballmer may come back if Yang is no longer in the picture. “I would think he’d be more interested in a post-Yang Yahoo. He wants a different interlocutor.”
Yahoo shares dropped $1.76 to $12.20.
Ballmer’s statement marked another odd twist in the battle over the future Yahoo.
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