Microsoft Yahoo! bid to go hostile say analysts

Wall Street analysts expect Microsoft to launch takeover fight for Yahoo! rather than drop deal

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By  Mark Sutton Published  April 28, 2008

A poll of Wall Street analysts conducted by news agency Reuters show that the majority of brokerages expect Microsoft to launch a hostile takeover of Yahoo! in the next few days.

On Saturday, a deadline set by Microsoft for the board of Yahoo! to accept its $31 per share offer expired. Microsoft CEO Steve Ballmer had threatened to either take the offer direct to shareholders, or even call off the bid if Yahoo! did not accept the deal.

While neither party has made any announcements since the deadline passed, nineteen analyst companies out of twenty-five questioned by Reuters said they expect Microsoft to attempt a hostile takeover without increasing their offer, potentially resulting in a long proxy fight.

"I'm betting that Ballmer is bluffing with his ‘walk away' comments and that he's going hostile," said Jefferies & Co. analyst Youssef Squali.

Only three brokerages expected Microsoft to improve its offer, while three more though that Microsoft would walk away.

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