Chapter 8
Applying Relative, Asset-Oriented, and Real-Option Valuation Methods to Mergers and Acquisitions
Most people are about as happy as they make up their minds to be.
—Abraham Lincoln
Inside M&A: a real-options perspective on microsoft's dealings with Yahoo!
In a bold move to transform two relatively weak online search businesses into a competitor capable of challenging market leader Google, Microsoft proposed to buy Yahoo! for $44.6 billion on February 2, 2008. At $31 per share in cash and stock, the offer represented a 62% premium over Yahoo!'s prior day closing price. Despite boosting its bid to $33 per share to offset a decline in the value of Microsoft's share price following the initial offer, Microsoft was rebuffed by Yahoo!'s board ...
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