Microsoft possible takeover of yahoo?

Question

Microsoft is offering to buy yahoo for 44 billion but yahoo refused, and now Microsoft is going hostile.

My question is, why can't Microsoft just buy all the shares on the market as a regular share holder would, to take over the company?

Is there a reason why they can't just buy all the shares on the market since Yahoo is public?

Answer 1

Because there are 1,249,300,000. shares in the public's hands (called the float). If Microsoft had bought every single share that traded today, which was an above average day for sales volume of Yahoo stock, it would have purchased only 80,447,248 shares or considerably less than 1% of the outstanding shares. Not nearly enough to even make a dent let alone a takoeover. What do you think would happen to the price of Yahoo stock if everyone knew that Microsoft wanted to buy every available share? The price would go up every day especially when Microsoft was getting close to a controlling percent.

Answer 2

Because buy over 1 billion shares on the open market will likely drive the price higher than 31 per share.