Yahoo/Microsoft deal could be back on

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The merger of Yahoo and Microsoft could be back on after billionaire Carl Icahn bought a large shareholding in Yahoo. Icahn began amassing stock in Yahoo late last week, building a significant position that could be as many as 50 million shares according to cnbc.

Microsoft had abandoned its bid to buy Yahoo earlier this month when they could not meet the $37 per share the Yahoo board demanded. Microsoft’s highest bid was $33 per share.

Yahoo chairman Jerry Yang was confident of his company increasing its revenues by 25 per cent in the next two years, and said that Microsoft’s offer was therefore too low.

Forbes magazine lists Icahn as having a personal net worth of $14.5bn and takes the position of the 18th richest person in the world.

Icahn had bought his stock when the merger was called off and Yahoo’s share price fell to $25. At that price, Microsoft’s offer would make him a significant profit. If Icahn were to win 3 or 4 board seats, he could possibly force a deal with Microsoft.

A merger between Yahoo and Microsoft could spell disaster, however. Analysts have predicted that the merged company would get bogged down in government regulation and lose key staff in droves.



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