We canvassed a couple of Wall Street M&A moguls last night for their thoughts on how the Microsoft-Yahoo (MSFT/YHOO) deal would play out. Their thoughts:
* It's a done deal.
* Jerry's language in his "letter to shareholders" was a bold move. The use of the word "subtantially"--as in "Microsoft's bid "substantially undervalues" Yahoo--will expose the board to lawsuits if the deal gets done at, say, $32-$33. Yahoo's lawyers must be peeing in their pants about this, especially since the value of Microsoft's offer has since dropped
* Microsoft will give Yahoo a couple of weeks to "have its talks" with others. These talks won't lead anywhere, and both sides know it.
* Microsoft will gradually ramp up the proxy fight rhetoric. Meanwhile, Yahoo's board will begin to get more and more pressure from Yahoo's big institutional shareholders to initiate talks.
* At some point soon, Yahoo's lead banker, Goldman Sachs, will call Microsoft's lead banker, Morgan Stanley, and talks will begin.