Just two weeks after breaking off merger talks, Microsoft Corp. and Yahoo Inc. have been pulled back to the bargaining table by their fears about what might happen if they don't work out a deal.
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The notion of a half-baked deal didn't excite investors Monday as they got their first chance to react to Sunday's news that Microsoft and Yahoo are talking again.
Yahoo shares rose a scant 0.7 percent, or 2 cents, to close at $27.68 on Monday, while Microsoft shares fell 1.8 percent, or 53 cents, to close at $29.46.
But most analysts remain convinced the preliminary talks will culminate in Microsoft buying Yahoo for somewhere between $33 to $37 per share, a price that translates to $47.5 billion to $53 billion.
Both Microsoft and Yahoo issued statements Sunday acknowledging they haven't ruled out the possibility of a merger even though they aren't discussing one now.
Although their discussions fell apart this month in a disagreement over price, both Yahoo and Microsoft have powerful incentives to reach a compromise within the next few weeks.
If Yahoo doesn't stop demanding $37 per share, its board could be overthrown in a shareholder mutiny led by activist investor Carl Icahn.
To pressure Yahoo into reviving the talks, he has nominated an alternate slate of 10 directors scheduled to stand for election at Yahoo's July 3 annual meeting. Icahn didn't respond to a request for comment Monday.
