mikedee - 3:11 pm on Feb 5, 2008 (gmt 0)

Guys, yahoo has some $17 billion in assets that can be sold if MSFT wanted to so no borrowing would happen

Aren't we talking about financing the purchase of Yahoo? Surely you can't buy a company with its own assets?

Yahoo would be best off selling all their assets before the takeover, maybe to Google. MS has committed to buying Yahoo at any cost so they would probably take it missing a few assets. Add a few unanticipated regulatory costs and Yahoo may be the biggest white elephant ever.

Plus, suppose Msft borrows the entire $20 Billion, that is just 1.2 to 1.5 years of profits. Hardly a disaster. It's all relative and they still keep their $20 billion in cash they already have.

How do you suppose the market would react to 0 profit for 1.5 years? The loan would almost certainly be over 5-10 years or possibly more.

P.S. The current bid for Yahoo is $44.6 billion, not $20 billion - they would have to spend their cash AND borrow to buy it.