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July 5, 2008 7:08:09 AM CDT

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Microsoft May Borrow for 1st Time to Fund Yahoo Deal

Posted Feb 5, 08 8:09 AM CST in Technology,  Business    Most Covered

(Newser) – Microsoft is likely to borrow for the first time to finance its $44.6 billion bid for Yahoo, the company's CFO said yesterday, rather than drawing down its reserves to fund the half-cash, half-stock offer. After spending $31 billion on stock buybacks and dividend payouts in 2007, Microsoft has $21 billion cash on hand, Reuters reports. Meanwhile, Yahoo is said to be considering an alliance with rival Google in an effort to thwart Microsoft’s takeover try.

Yahoo founder Jerry Yang is said to be looking to top Microsoft's $31-a-share offer by exploring other opportunities, including revisiting months-old talks with once-bitter rival Google on some form of partnership, reports the Daily Telegraph. Other companies looking to avert a Microsoft deal also have approached Yahoo.

Sources Reuters, Daily Telegraph (UK)

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A Yahoo worker walks into Yahoo headquarters in Sunnyvale, Calif., Tuesday, Jan. 29, 2008. Microsoft Corp. has pounced on the slumping Internet icon with an unsolicited takeover offer of $44.6 billion...   (Associated Press)
The reception desk is shown at Google's New York offices on Thursday, Jan. 31, 2008. Google Inc. says Microsoft Corp. could use its proposed $42 billion acquisition of Yahoo Inc. to gain illegal control...   (Associated Press)
This combination of two photos shows Microsoft founder Bill Gates, left, and Yahoo CEO Jerry Yang. Microsoft Corp. on Friday, Feb. 1, 2008 pounced on slumping Internet icon Yahoo Inc. with an unsolicited...   (Associated Press)
This set of flagpoles sits at one of the entrances to Microsoft Corporation in Redmond, Wash., Monday, Oct.19, 1998. Microsoft Corp. offered Friday Feb. 1, 2008 to buy search engine operator Yahoo Inc....   (Associated Press)
Microsoft chairman Bill Gates smiles during his keynote speech at the Consumer Electronics Show in Las Vegas on Jan. 6, 2008. Google Inc. says Microsoft Corp. could use its proposed $42 billion acquisition...   (Associated Press)
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