|
SAN DONATO MILANESE (USA) - Microsoft Corp is prepared to walk away from its US$43.6 billion (S$58.9 billion) bid for Yahoo if the two sides can't agree on a price, chief executive Steve Ballmer said on Wednesday.
Speaking at a technology conference near Milan, Mr Ballmer said Yahoo's better-than-expected first-quarter results, reported on Tuesday, have not changed Microsoft's view of Yahoo's value.
Microsoft sees Yahoo as a way to compete with arch-rival Google in the Internet search and advertising arena, but it has limits to what it is willing to pay to get a deal done.
'We're prepared to move forward without a merger with Yahoo,' Mr Ballmer said. 'We think the best way to move forward quickly (and gain critical mass against Google) is to come together with Yahoo.'
'Hopefully that works. But if it doesn't, we go forward,' he said. 'Time is money. We made (that) clear in the last letter we sent.'
In that letter, Mr Ballmer set a Saturday deadline for Yahoo's board to accept a deal with Microsoft or face a lower bid that Microsoft would take directly to Yahoo's shareholders. Yahoo's board of directors has said Microsoft's cash-and-stock offer significantly undervalues the company.
'It is unlikely Microsoft will walk away, as the company has a strategic imperative to establish a more significant presence in Internet advertising,' Marianne Wolk, analyst with Susquehanna Financial Group, wrote in a report on Wednesday.
The value of Microsoft's offer for Yahoo has fallen to US$30.36 a share from US$31.00 because of a decline in Microsoft shares. In order to regain the bid's full value, Microsoft's stock would have to rise to US$32.60, the closing share price on Jan 29, a day before Microsoft presented its unsolicited offer to Yahoo's board.
Shares of Microsoft were up 98 US cents, or 3.24 per cent, to US$31.23 in afternoon Nasdaq trade. The company is to report its results for the March quarter on Thursday.
Yahoo shares were below Microsoft's offer, down 46 US cents to US$28.08 on the Nasdaq.
In the video game sector, Mr Ballmer was asked if Microsoft plans to alter its Xbox prices in light of a cut in prices for its Xbox 360 video game console in Europe last month.
'We're pretty comfortable right now with Xbox pricing,' he said. -- REUTERS
|
