Thursday, February 28, 2008

Google hires Credit Suisse to advise on potential Yahoo stake - rumor

Google has hired George Boutros of Credit Suisse on a potential acquisition of just under 20% of Yahoo, potentially disrupting Microsoft’s bid, according to a report on Techcrunch. The blog cited sources with knowledge of the deal saying Boutros was hired the day after Microsoft’s bid. However, only one source reported that Boutros may be advising on acquiring a stake in Yahoo. The goal of such a deal could be to delay any merger with Microsoft in order to buy Google time to react to the change in the competitive landscape.
The blog cautioned that arbitrageurs had not yet heard any rumor regarding an upcoming offer from Google. Henry Blodget at Silicon Alley Insider wrote that such a move could be possible, despite the high cost of Yahoo’s stock. Blodget pointed out that Google currently has USD 14bn in cash, and would still have considerable reserves if it decided to take a blocking stake. Furthermore, Google pulled a similar trick with AOL when Microsoft and Yahoo were considering bids for the Time Warner unit.
Kara Swisher at All Things Digital wrote that such a move would be detrimental to Google anyway, both because of the expense of Yahoo stock and the shareholder lawsuits that would likely result from the play.


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