After the search company announced its decision yesterday to extend the 14 March deadline for the selection of a new board, Yahoo has left it to Microsoft to make the next move in a long-running takeover bid, amidst reports the software giant may be prepared to offer a lucrative cash deal for the company.
An all-cash deal is on the cards for Microsoft in its unsolicited bid for Yahoo, according to a report in the New York Post.
The report, citing anonymous sources, says Microsoft is considering changing the way the deal is valued to 100 percent cash.
Under its current offer, Microsoft is valuing the deal using a formula that is based on 50 percent cash and 50 percent Microsoft stock. As a result, the value of Microsoft's offer rises and falls based on the performance of its own stock price.
Silicon Alley Insider has a close-to-real-time running tab of the deal's value, which puts the Microsoft buyout bid at $28.77 per share.
Should Microsoft change its formula to 100 percent cash, the company has the option to lock in the price based on its current 50-50 formula or set it at a flat rate of US$31 a share, the value of Microsoft's initial buyout bid for Yahoo.
According to the Post report, one effect Microsoft would be looking to achieve via an all-cash weighted deal is support from longtime Yahoo investor Softbank, which is represented on Yahoo's board.
