http://www.microsoft.com/presspass/press/2008/feb08/02-01CorpNewsPR.mspx
http://www.microsoft.com/presspass/press/2008/feb08/02-01CorpNewsMA.mspx
Microsoft Proposes Acquisition of Yahoo! for $31 per Share
Transaction valued at approximately $44.6 billion in cash and stock; provides
62 percent premium to current trading price for Yahoo! shareholders; combined
entity to create a more competitive company, providing superior value to
shareholders, better choice and innovation for customers and partners
REDMOND, Wash. - Feb. 1, 2008 - Microsoft Corp. (NASDAQ:MSFT) today announced
that it has made a proposal to the Yahoo! Inc. (NASDAQ:YHOO) Board of Directors
to acquire all the outstanding shares of Yahoo! common stock for per share
consideration of $31 representing a total equity value of approximately $44.6
billion. Microsoft's proposal would allow the Yahoo! shareholders to elect to
receive cash or a fixed number of shares of Microsoft common stock, with the
total consideration payable to Yahoo! shareholders consisting of one-half cash
and one-half Microsoft common stock. The offer represents a 62 percent premium
above the closing price of Yahoo! common stock on Jan. 31, 2008.
"We have great respect for Yahoo!, and together we can offer an increasingly
exciting set of solutions for consumers, publishers and advertisers while
becoming better positioned to compete in the online services market," said
Steve Ballmer, chief executive officer of Microsoft. "We believe our
combination will deliver superior value to our respective shareholders and
better choice and innovation to our customers and industry partners."
"Our lives, our businesses, and even our society have been progressively
transformed by the Web, and Yahoo! has played a pioneering role by building
compelling, high-scale services and infrastructure," said Ray Ozzie, chief
software architect at Microsoft. "The combination of these two great teams
would enable us to jointly deliver a broad range of new experiences to our
customers that neither of us would have achieved on our own."
The online advertising market is growing at a very fast pace, from over $40
billion in 2007 to nearly $80 billion by 2010. The resulting benefits of scale
along with the associated capital costs for advertising platform providers make
this a time of industry consolidation and convergence. Today this market is
increasingly dominated by one player. Together, Microsoft and Yahoo! can offer
a competitive choice while better fulfilling the needs of customers and
partners.
"The combined assets and strong services focus of these two companies will
enable us to achieve scale economics while reaching R&D critical mass to
deliver innovation breakthroughs," said Kevin Johnson, president of the
Platforms & Services Division of Microsoft. "The industry will be well served
by having more than one strong player, offering more value and real choice to
advertisers, publishers and consumers."
The combination will create a more efficient company with synergies in four
areas: scale economics driven by audience critical mass and increased value for
advertisers; combined engineering talent to accelerate innovation; operational
efficiencies through elimination of redundant cost; and the ability to innovate
in emerging user experiences such as video and mobile. Microsoft believes these
four areas will generate at least $1 billion in annual synergy for the combined
entity.
Microsoft has developed a plan and process that will include the employees of
both companies to focus on the integration of the combined business. Microsoft
intends to offer significant retention packages to Yahoo! engineers, key
leaders and employees across all disciplines.
Microsoft believes this proposed combination would receive all necessary
regulatory approvals and expects that the proposed transaction would be
completed in the second half of calendar year 2008.
Microsoft is also committed to working closely with Yahoo! management and its
Board of Directors as they, along with Yahoo! shareholders, evaluate this
compelling proposal.
Below is the text of the letter that Microsoft sent to Yahoo!'s Board of
Directors:
January 31, 2008
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer
Dear Members of the Board:
I am writing on behalf of the Board of Directors of Microsoft to make a
proposal for a business combination of Microsoft and Yahoo!. Under our
proposal, Microsoft would acquire all of the outstanding shares of Yahoo!
common stock for per share consideration of $31 based on Microsoft's closing
share price on January 31, 2008, payable in the form of $31 in cash or 0.9509
of a share of Microsoft common stock. Microsoft would provide each Yahoo!
shareholder with the ability to choose whether to receive the consideration in
cash or Microsoft common stock
