Microsoft in $44.6 bil Yahoo bid


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Microsoft Corp. has made an unsolicited $44.6 billion cash and stock bid for Yahoo Inc. in a push to become what its CEO on Friday morning called a "comfortable" No. 2 behind Google Inc.

The offer is valued at $31 per share and represents a 62% premium over Yahoo's weakened stock price. It would mark Microsoft's biggest deal ever.

Microsoft management said Friday morning that media and technology companies have encouraged it to move on Yahoo to provide a counterweight to Google.

Yahoo said its board will "evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders."

Microsoft and Yahoo had talked about various types of alliances or combinations in the past, and analysts have in recent days suggested now is the time for a big acquisition move after a disappointing earnings report that made Yahoo shares hit a four-year low (HR 2/1).

Microsoft said it expects $1 billion in cost savings in the deal and regulatory approval in the second half of the year.

"Together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," Microsoft CEO Steve Ballmer said.