Yahoo's first quarter is coming to a close at the end of the month, potentially increasing pressure on the company to decide whether it will negotiate with Microsoft over its unsolicited buyout bid.
The close of the quarter, after all, will be accompanied by a conference call the company will hold with analysts to discuss its financial results.
"I think the first-quarter earnings will be a hard deadline," said one investment banker. "They'll need to address things like their restructuring initiatives, earnings, and how it would look if they merged with company X, verses remaining as a standalone company."
The quarterly conference call is usually a big deal for investors, who typically like to hear the CEO address the outlook for the company. Yahoo has set its first-quarter earnings release for April 22, according to a spokeswoman. Last year, Yahoo held its first-quarter conference call on April 17.
Thirty-five days have passed since Microsoft trotted out its buyout bid. And to date, Yahoo has not formally responded to the offer.
The investment banker, who requested anonymity, said most plain-vanilla mergers tend to take four to six months from kick-off to close.
But if Microsoft goes hostile and launches its own slate of directors to oppose Yahoo's board at the next annual shareholders' meeting, the deal could potentially be delayed until October, said one Delaware attorney.
Microsoft could go to the Delaware Chancery Court on July 13, one year and a day after Yahoo held its last shareholders' meeting, and ask the judge to force a shareholders' meeting, said Stephen Jenkins, a director with Delaware law firm Ashby & Geddes, which has handled a number of proxy fights.
Microsoft's next steps have yet to be revealed, now that Yahoo announced Wednesday it was delaying the deadline for Microsoft to name its opposition slate. Yahoo extended its deadline in the hope it would buy the company more time to consider Microsoft's offer and talk with other suitors, without simultaneously having to deal with a proxy fight with Microsoft.
Although there are reports that Yahoo is holding talks with AOL and News Corp., neither has announced a competing bid. And Yahoo, as a result, hasn't taken the time to take a hard look at antitrust issues that might crop up in a merger with either of those companies, but has for Microsoft, said one source familiar with the matter.
Microsoft would likely face antitrust hurdles with a Yahoo merger and need to divest of some assets of the combined company, the source said, ranking the chances of a deal going through as 7 on a scale of 1 to 10.
But will any potential antitrust risk translate into a higher purchase price for Yahoo? So far, not yet.