Microsoft to value Yahoo deal based on all cash?
Software maker is weighing whether to ditch its current offer, based on a cash-stock valuation, for one based on a fixed cash price, according to reports.
Cash is king in deal making, and Microsoft's unsolicited bid for Yahoo may be throwing more greenbacks into the mix, 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, it'll be interesting to see if it locks in the price based on its current 50-50 formula or sets it at a flat rate of $31 a share, the value of Microsoft's initial buyout bid for Yahoo.
Such a move may warm the hearts of investors, who, in turn, could put the screws to Yahoo's board. The Post report says 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.