Of course Yahoo's going to say that!
They want to maximize everything they can of course.
And MS might actually pay more, simply because they feel like they have to because they really do need to be able to compete with Google and nothing else they've tried has made any difference.
The problem with Y's stance that the price is too low is that the offered price was significantly
more than YHOO was trading at prior to the offering. Significantly more as in over 60% more than the stock was valued at the day the offer was made. And if you look at the historical figures YHOO hasn't consistently been at or above the offered price for around 2 years. They might hit $31 for a month or so during a year, but for the most part they've been a low $20's share since 2006. The last time they were consistently above $31 per share was 2005 and the first month or two of 2006. Then they hung around the offering price much of 2006. Since then they've done nothing but lost value, all while Google managed to quadruple their stock value.
I'd say MS probably picked a pretty good number. High enough to get everybody's attention and make saying No pretty darned difficult for the average YHOO investor. But a price that still gives them some wiggle room in case they want to come back with a second offer.
Those guys are certainly shrewd, I'll give them that. Especially considering Mr Bill could probably fund the entire purchase out of his personal piggybank if he felt like it.
Now where it's going to get really funny is when Google starts throwing out the Monopoly card, when in this particular sector it's Google who has the monopoly, not Microsoft.