Microsoft Corp, the software giant, said on Friday it had offered to acquire Internet media company Yahoo Inc in a proposed cash and stock deal valued at $44.6 billion.
Microsoft said it had offered to buy Yahoo for $31 per share, which it said represented a 62 per cent premium above the company's closing stock price on Nasdaq on Thursday.
Robert Breza, Managing director, RBC Capital markets
"I'm not totally surprised, with Yahoo stocks heading lower and lower."
"Microsoft has been getting more aggressive with acquisitions. We've seen them start to step up and buy large public players. Strategically, it makes sense."
"I think it's a fair price for Yahoo shareholders. It's a fair price. Clearly Yahoo shares have been under pressure. Microsoft wants to get it done, and get it done quickly. Trying to offer them a 10 per cent premium would be kind of foolish. You'd create a problem, you'd let other bidders get into the fray..."
"We all really know why they're doing it. It's to compete more effectively against Google. Microsoft has the war chest of money. They generate over a billion dollars every month in free cash flow. They see this as an opportunity to add great capabilities... It will strategically add a lot to Microsoft, mostly obviously in the search side, but there are also many other things. Yahoo has one of the best brand names in the Internet."
Tim Smalls, Head of US stock trading at Brokerage firm
"Shocking! To me, the premium seems exorbitant, for what is a dwindling business. I personally don't see how the synergies of Microsoft-Yahoo is going to take on Google."
"It will obviously help the stock market immensely -- the overall market loves a big deal, here you go, and the futures are screaming."
"This is going to take everybody's attention today. Especially in a distressed market, if you get a financial deal or a technology deal, that's really going to captivate the market and that's what you've got right now."
Paul Mendelsohn, chief investment strategist, Windham Financial
"That seems to be eclipsing everything and set the futures off and running. That's obviously important to the (stock) market. It's been looking for something like this for quite some time, and it's offsetting the Google news from last night. So this is good timing on Microsoft's part, and discounting the bad news in the technology sector."
"I think (a deal) makes sense. Yahoo is having a really tough time competing against Google. Whether it's a good price, I can't see anybody else who is going to outbid Microsoft."
(Reporting by Caroline Valetkevitch and Kristina Cooke in New York)