FIN 423 Case #2 - Microsoft - Yahoo Takeover

Study the recently announced takeover offer by Microsoft for the acquisition of Yahoo. One article from the Wall Street Journal is attached. Also, data for the closing stock prices of these companies, along with the S&P 500 index, are available in a spreadsheet on the case web page. You may use any information that is available as of February 15, 2008, but you may not let events that occur after February 15 influence your analysis.


Your assignment is to analyze this takeover battle from the perspective of each of these firms, and to make recommendations for each of these firms about how to proceed in the future with respect to this takeover. Among the set of questions you should address include (but are not limited to):

  1. Do you think that Microsoft will eventually acquire Yahoo on the current terms? If not, why not?

  2. Do you think that one of Yahoo's competittors will try to block this merger through litigation and/or regulatory battles? If so, which strategy should they pursue, and is this a NPV > 0 project for them?

  3. Is it likely that the relevant regulatory authorities will allow this merger to occur? Why?

  4. Is it likely that Yahoo shareholders will seek to obtain a higher price from Microsoft? Will they sue Yahoo management?

You must prepare a report summarizing your analysis (due March 11) and be prepared to defend your position in class.

A full-text version of this assignment is available in Acrobat's portable data format (.pdf). The file is about 19K and can only be viewed (and printed) using a copy of Acrobat Reader.

If you want the current version of the Adobe Acrobat Reader for other platforms, visit Adobe's web page by clicking the image below.

Click here to download this assignment.

Click here to see the histogram showing the grades for the reports.

A histogram showing the grades for the reports is available in Acrobat's portable data format (.pdf). The file is about 3K and can only be viewed (and printed) using a copy of Acrobat Reader.

Click here to download this graph.

An example of a good answer to this case is available in Acrobat's portable data format (.pdf). The file is about K and can only be viewed (and printed) using a copy of Acrobat Reader.

Click here to download this sample answer.

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Last Updated on 2/21/2008