Microsoft bid $33, Yahoo’s best offer was $37, and so the merger is off.
Yahoo strikes me as a bit greedy. Their stock closed at $19.18 the day before the merger was announced (have a look at the chart here), so Microsoft’s $31/share takeover offer amounted to a sixty-one percent takeover premium. That’s big by any standard (a normal premium is anywhere from 20% to 40%), but Yahoo were holding out for a 90% premium – and that’s just insane.
Yahoo closed yesterday at $28.67, up nearly 7% on the back of rampant speculation that Microsoft would raise its bid. I’ll be very surprised if Yahoo ends much above $20 at the close of business on Monday. Call it $23… that’s my tip anyway.
Update: next week will be a tough week for Yahoo, says TechCrunch.