The tech space is abuzz with a possible acquisition of Tumblr by Yahoo in an all out cash deal of $1.1 billion. The newest of the rumor to this end is that the tumbleloggin company isn’t impressed with the amount, and may reject the offer.
According to a TechCrunch report, Tumblr is viewing Yahoo’s $1.1 billion cash offer as “too low” and “only a first offer”. Plus, the company has Facebook and Microsoft ready to take the pie. Does that mean Tumblr is rejecting Yahoo’s offer?
Earlier, AllThingsD reported that Yahoo board is meeting on Sunday evening over the deal. If Yahoo CEO Merissa Mayer can get the approval of the board over the deal, the Yahoo-Tumblr discussions can result in an offer.
Do you think Tumblr will turn down Yahoo’s offer and start looking for a higher price from Facebook or Microsoft? Don’t jump to conclusions too early.
Even if Tumblr turns down Yahoo’s offer, it is unlikely to result in a bidding war. Because, Yahoo is currently negotiating under a lockup, and if it makes an offer than Facebook and Microsoft conversations won’t hold.
Yahoo is interested in an outright acquisition, rather than an investment or partnership. To make that happen the Yahoo management has to convince its board, and at the same time convince Tumblr CEO David Karp that his company won’t be “absorbed into a behemoth” and “raided for talent and traffic”.
On Tumblr’s side, playing too hard-to-get may not be a wise decision. The company announced earlier that it has enough cash only to support the current setup for the next three months.