Microsoft to value Yahoo deal based on all cash?

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.

[Penguinisto]

Now that's some debt.

They're going to wipe out their entire cash reserve (~$19bn), then take on more than that in debt...

I really hope that remaining #2 against Google, while blowing their bank account and imperiling their stock will be worth it for 'em...

/P

[onlyauser]

Silly, clueless comment...

You are 100% clueless regarding Microsoft financials. If you had ANY access you would see a sprawling octopuss money machine that currently ecilpes Google regardless of all the pundits and Google fan-boys (me being one)!

Microsoft as huge holding in...well everything. They have set themselves up to prevent a fall regardless what happens in their current main industries.

Get a clue. Microsoft is MUCH more than Microsoft. It is also your Campbell's soup, Wonder Bread and everytime you use any utility almost! LOL! Everyone needs to get aware that Microsoft is everywhere and has more money than our pea sized brains can comprehend.

I cannot actually comprehend what a couple billion would empower me to do. Never been even close as not many have.

[Vegaman_Dan]

That's assuming...

You're assuming that Microsoft does absolutely nothing with the service and that it doesn't generate any income at all.

Somehow I don't think Microsoft would buy a company if it couldn't generate income for them.

I would strongly suspect that they have plans for it that would easily pay off the amount in a short turnaround time.

Of course neither you or I are in any position to know so anything you or I say is purely speculation.

Let's leave this one to the experts.

[hunter_jc]

Now thats a deal

That would be good. Spread the money around.