Yahoo's Microsoft-Icahn-Google bill reaches $73 million
Yahoo sat at the negotiating table with Microsoft and then Google. And while it didn't get a bite to eat, it's now stuck with a multimillion-dollar bill.
Yahoo has no search advertising deal with Google, and ditto for its disappointment in luring Microsoft back to the table for an outright buyout of the entire company. But what it does have to show for its efforts is a $73 million bill to outside advisers, according to the company's filing with the Securities and Exchange Commission.
According to the SEC filing, filed last week, here are the various components that make up the $73 million bill:
Income from operations for the three and nine months ended September 30, 2008 includes incremental costs of $37 million and $73 million, respectively, for outside advisers related to Microsoft's ("Microsoft") proposals to acquire all or a part of the company, other strategic alternatives, including the Google agreement, the proxy contest, and related litigation defense costs.
The Internet search pioneer began accruing its bill back in February, when Microsoft launched its unsolicited buyout bid to acquire the entire company for $31 a share. That offer was later upped to $33 a share, but withdrawn in May after Yahoo countered with a $37 a share price and time had, in essence, lapsed to complete a deal before a change in presidents.
When Microsoft stepped away from the negotiating table, Yahoo faced another fight on its hands when shareholder activist Carl Icahn launched a proxy fight against the company to gain control of the board. Ultimately, the parties settled and Icahn and two representatives from his dissident directors slate in the Yahoo proxy fight were named to the Internet search pioneer's board of directors.
Meanwhile, more recently, the company's search advertising deal with Google, which was discussed when Microsoft was still in the hunt for the Internet company, fell by the wayside this month after antitrust regulators said they would file a lawsuit to block the deal and Google opted to step back from the agreement.
While those various expenses have subsided, one continuing cost for Yahoo is defending itself against the number of shareholder lawsuits that were filed after it rejected Microsoft's initial $31 a share bid and its sweetened $33 a share offer.
When Microsoft made its first offer in February, Yahoo's stock was trading in the high $14 a share range. Today, the stock is trading in the low $11 a share range.