Microsoft forced to borrow to pay for Yahoo
By Matthew Sparkes
Posted on 5 Feb 2008 at 13:23
Microsoft may slip into debt for the first time if the proposed Yahoo takeover goes to plan, as even its significant cash reserves cannot fund the largest ever technology takeover.
The company has suggested that half of the $44.6 billion purchase price will be paid in stock, while the remaining half will be covered with cash. A full cash purchase would be too large a financial risk, says chief executive, Steve Ballmer.
Although the company has huge liquid reserves, estimated at over $20 billion at the end of 2007, it will still need to take on debt to complete the deal. Several years ago Microsoft's cash reserves topped $60 billion, but has since been heavily dented by stock buy-backs.
The cash half of the deal will be covered by "a mixture of the cash we have on hand plus debt," according to chief financial officer, Christopher Liddell.
Is your business a social business? For helpful info and tips visit our hub.
- Move over Delia: IBM Watson is cooking tonight
- Eric Schmidt on the double-edged smartphone: friend and foe
- Getty joins the race to the bottom
- Hour of Code: five steps to learn how to code
- Sony Xperia Z2 Tablet review: first look
- Sony Xperia Z2 review: first look
- Samsung Galaxy Gear 2 review: first look
- Nokia XL review: first look
- Samsung Galaxy S5 review: first look
- Nokia X review: first look
- Windows Server 2012 R2: how the Datacenter edition could change SMBs
- Invoices and VAT: how to set up your documents correctly
- Nexus 5 vs Samsung Galaxy S4 Active: the best phone for avoiding screen burn
- How much is a social user worth?
- The key to choosing a secure password
- Thunderbolt Bridge: a fast Mac migration tool
- Should you advertise on Twitter?
- How to track a lost smartphone
- Self-publishing success: the best way to sell your book
- 1.6TB SSD: why would you need one?