Time for Plan B

May 5, 2008

yahoo.jpgThis is what the morning after looks like for Yahoo: a stock down 20 percent in pre-trading, and investors wondering whether Jerry Yang has a Plan B in his back pocket after Microsoft walked away from one of the strangest pseudo-hostile takeover bids in recent memory. One option is obvious: “It’s time to get a move on with Google,” said Jeffrey Lindsay, analyst with Sanford C. Bernstein. “Let’s hope they weren’t bluffing.”

Deutsche Telekom is looking at a possible purchase of No. 3 U.S. wireless company Sprint Nextel, Der Spiegel magazine reported on Saturday, and is considering options including a merger or an outright takeover. Deutsche Telekom’s T-Mobile USA is the fourth-biggest operator; a combination with Sprint would catapult T-Mobile to the number one spot, although Sprint and T-Mobile use incompatible wireless networks.

Warren Buffett said on Sunday that Berkshire Hathaway may be close to buying a medium-sized British company and will look at Royal Bank of Scotland‘s insurance unit, Britain’s second-largest general insurer, valued at up to 8 billion pounds ($15.8 billion).

More Deals:

** Malaysia’s top lender, Malayan Banking, has bought a 15 percent stake in Pakistan’s largest listed lender MCB Bank for $680 million, betting on a bright economic future despite its recent political turbulence.

** Kuwait’s Burgan Bank plans to buy 194 million dinars ($727.7 million) in assets from Bahraini lender United Gulf Bank, the two companies said in a statement.

** U.S. property company Colony Capital and French investment group Eurazeo said they planned to raise their stake in hotels and services group Accor to around 30 percent.

** Israel’s Bank Leumi said it agreed to sell 15 percent of cable operator HOT to Internet service provider Netvision for 480 million shekels ($139 million).

** The European Commission said it had suspended its review of plans by Austrian oil and gas group OMV to take over Hungarian peer MOL.

** British market research firm Taylor Nelson Sofres has rejected an unsolicited proposal from advertising group WPP to buy it for 950 million pounds ($1.87 billion), it said on its website.

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The company’s shareholders could remain skeptical over whether Yahoo’s Directors, including Jerry Yang, acted in their best interest, and they will probably use proper grammar to make their point. They might see Mr. Yang’s small-caps style as being indicative of a sort of egocentric mentality that’s lacking in real-word circumspection. Indeed, many of the shareholders may even be irate over what many could see as the company passing up a good offer from Microsoft, especially after the Redmond company increased its bid during the later stages of negotiations. This dissatisfaction could cause many of Yahoo’s shareholders to attempt the ouster of its Directors.


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