With Microsoft withdrawing its bid to acquire Yahoo, the global IPost MS bid, Yahoo! readies for changenternet company has said it will now focus on 'the most important transition' in its history for the shareholders' benefits.
"With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximise our potential to the benefit of our shareholders, employees, partners, and users," Yahoo CEO Jerry Yang said in a statement.
Yahoo said that Microsoft was just not willing to pay enough for the internet company to make the deal worthwhile.
"From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft's offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view," Yahoo Chairman Roy Bostock said in a statement.
Microsoft withdrew its offer after on Saturday, following a flurry of negotiations on Friday that saw the software maker increasing its $31 per share cash and stock offer to $33.00 per share, adding approximately $5 billion to the original offer made in February.
Although, the upped offer represented 70 per cent premium on Yahoo's closing share price on the night Microsoft made its unsolicited offer, it was still too low for Yahoo, which according to Microsoft CEO Steve Ballmer, insisted on at least $37 per share.
In his statement, Bostock indicated that Yahoo would do well on its own and pursue strategic opportunities that position Yahoo for success and leadership in its markets.
Although not providing any details, Bostock said, "Yahoo! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making."
However, most analysts expect Yahoo share prices, which closed Friday at $28.67, up nearly 7 per cent, to drop sharply when the US stock markets open on Monday.
"Clearly the stock will drop meaningfully on Monday, because as a stand-alone company it continues to struggle to grow profits and market share," Stanford Group analyst Clayton Moran told the Los Angeles Times newspaper. "This deal was a very attractive offer."
Analysts expect Yahoo's stock price to plunge but not upto $19.18, which was closing price on the day before Microsoft publicly announced its offer.
Yahoo can also expect shareholders' backlash in the form a flurry of lawsuits accusing management of not looking out for investors' best interests.
Many analysts also believe that this may not be the end of Microsoft-Yahoo saga, pointing out a possibility of Microsoft returning for another bid, especially if Yahoo's stock price tanks significantly and shareholders press for fast change.
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