Some expect Microsoft to raise offer for Yahoo
Some speculate that Microsoft may sweeten its bid for Yahoo.
SAN FRANCISCO -- While Yahoo ponders Microsoft's $44.6 billion acquisition bid, there is rising speculation on Wall Street that Microsoft may sweeten its bid to intensify pressure on Yahoo's board.
Yahoo has yet to decide on whether to accept the offer, CEO Jerry Yang told employees in an e-mail filed with the Securities and Exchange Commission on Wednesday. Yang said Yahoo's board is evaluating alternatives and has hired "top advisers" to assist it. The e-mail, addressed to "yahoos," in lower-case letters, said: "no decision has been made about microsoft's proposal. our board is thoughtfully evaluating a wide range of potential strategic alternatives."
Yahoo's chief financial officer, Blake Jorgensen, canceled a presentation at an investor conference here. It would have been the first public appearance by a Yahoo executive since Microsoft announced its bid.
Yahoo shares were down slightly, to $28.57, on Wednesday, more than $2 below the $31 price Microsoft offered last week. Investment bank UBS expects the software giant to raise its bid to $34. "We would not be surprised to see Microsoft sweeten the pot somewhat to make the decision easier for Yahoo's board," UBS wrote in a note.
Others aren't as sure. "Unless there's an alternative suitor — and there isn't — Microsoft will not bid against itself," says Steve Baloff,a general partner at venture-capitalist Advanced Technology Ventures.
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