There has been a lot of speculation over the last few days that Microsoft (MSFT) will raise its hostile takeover offer for Yahoo! (YHOO). This is illustrated by the fact that YHOO shares traded at a premium to MSFT's offer yesterday. However, a look at the largest holders of YHOO suggests that if YHOO is going to get a higher bid for the company, they may not want to rely on MSFT.
The table below lists the twenty largest shareholders of YHOO who also hold stakes in MSFT. As shown, these investors own nearly a third (29%) of YHOO's outstanding shares for a total value of $11.1 bln. However, at the same time, their holdings in MSFT are over 5 times that at ($57.9 bln). Given that the size of their holdings in the acquirer far outweigh the size of their holdings in the target, these holders may be on MSFT's side.
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OTOH, if these investors have a more valuable stake in MSFT, wouldn't they be exposing themselves to greater risk if the acquisition goes through, but the stock price of MSFT falls as a result?
Posted by: Anon | February 11, 2008 at 11:36 PM
The post is assuming MSFT shareholders agree with the move, but even if they don't raising the bid price only increases the chances of the deal going through. So, its just one more reason not to expect an increased bid.
Posted by: Paul | February 12, 2008 at 07:45 AM