10-K Watch: Yahoo Thinks Microsoft A Significant Distraction; Legal; Acq. Revs; Headcount
Yahoo’s annual 10-K has been filed. Some key details follow:
—The bid: “The review and consideration of the Microsoft (NSDQ: MSFT) proposal (and any alternate proposals that may be made by other parties) have been, and may continue to be, a significant distraction for our management and employees and have required, and may continue to require, the expenditure of significant time and resources by us. Microsoft’s unsolicited acquisition proposal has also created uncertainty for our employees and this uncertainty may adversely affect our ability to retain key employees and to hire new talent.” Somewhat amusingly, one of the company’s other warnings is that it has a poison pill program, which could make it difficult to acquire.
—Lawsuits: Some news on lawsuits beyond what’s reported, including an odd sounding lawsuit out of California: “The complaints allege that the Yahoo! Board of Directors breached fiduciary duties in connection with Microsoft’s unsolicited proposal to acquire Yahoo! (NSDQ: YHOO). The plaintiffs in two of the California lawsuits allege that Microsoft’s February 1, 2008 unsolicited proposal to acquire Yahoo! is inadequate and that the Yahoo! Board of Directors breached fiduciary duties by favoring Microsoft’s unsolicited proposal.” Altogether, the company is currently facing four MSFT-related suits.
—Total headcount: Reductions in headcount aren’t offsetting acquisition related employee growth. At the end of 2007, the company had 14,300 employees, compared to 11,400 a year ago. Of course, this gap will narrow as the latest layoffs are booked.
—Acquisitions: It spent about $974 million in acquisitions in 2007, including strategic investments, compared to $142 million and $1,698 million in 2006 and 2005, respectively. The company isn’t breaking out the revenue of Right Media, Zimbra, BlueLithium (its three main acquisitions) and other acquisitions, but it does offer a chart for revenue had these buys occurred at the beginning of 2006. By this, the combined 2006 revenue of these acquisitions was $97.3 million.
—Acquisitions II: The other acquisitions in 2007 besides the three main ones included: two other companies which were accounted for as business combinations. The total purchase price for these acquisitions was $108 million and consisted of $106 million in cash consideration and $2 million of direct transaction costs. The five other companies which were accounted for as asset acquisitions. The total purchase price for these acquisitions was $61 million and consisted of $23 million in cash consideration, $35 million in equity consideration, $2 million of assumed liabilities, and $1 million of direct transaction costs.
—Alibaba Group: Some financials for the privately held Alibaba Group, which is 43 percent owned by Yahoo: For the nine months ended June 30, 2007, the company had revenue of $205 million, but net losses of $47 million.
—Share buys: Without the boost from Microsoft’s bid, the company’s share buybacks in 2007 would not be looking well-timed: “During 2007, we used $1.6 billion in the direct repurchase of 57.9 million shares of our common stock at an average price of $27.34 per share.”
Posted In: Money, M&A & Venture Capital, Mergers & Acquisitions, Companies, Microsoft, Yahoo
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