Yahoo rejects Microsoft’s latest “take or leave it” proposal
Yahoo, the second-most-popular search engine, released in a statement that it received a joint proposal from Microsoft Corp and Carl Icahn on July 13. (The later is an activist investor who controls 69 million Yahoo shares.) And it was given less than 24 hours to accept it, which is “odd and opportunistic” as Chairman Roy Bostock said. It also said Microsoft and Icahn made clear they would not like to negotiate the fundamental terms, which include the immediate replacement of Yahoo’s board and removal of top management. “It is ludicrous to think that our board could accept such a proposal. We will not be bludgeoned into a transaction that is not in the best interests of our stockholders” Chairman Roy Bostock said in the statement.
Microsoft, which on May 3 withdrew an offer to buy Yahoo, made this latest proposal a few weeks before Yahoo’s annual meeting on August 1. Microsoft said last Monday it may renew talks for a deal if Icahn succeeds in ousting Yang and his board. Microsoft has been embroiled in on-again, off-again deal talks with Yahoo for six months. And it said it no longer wants to negotiate with Yang’s team.
The financial returns of the new proposal is not given a detailed statement, saying only that it was an improvement over an offer the software maker made in June but still carries less financial value and more risk than Yahoo’s current searching advertising deal with Google. But it added that Microsoft had again rejected its repeated offer to sell Yahoo for at least $33 per share. On that day Yahoo shares, climbing 1.3 percent this year closed at US$23.57 in Nasdaq Stock Market trading. Microsoft, which fell 20 cents to US$25.25 on Friday, has slipped 29 percent this year. But Yahoo had reported eight quarters of profit declines before Microsoft’s bid.
Yahoo said it was ironic that Icahn, who had previously urged the company not to sell its search business to Microsoft, was now supporting a proposal to do exactly that. And in the Wall Street Jouranal last week Yahoo’s CEO Jerry Yang accused Microsoft of wanting to disrupt the web search company. He also said it would be “a bad choice” for Yahoo shareholders to trust Icahn.
Bostock. Concerning this proposal Bostock said Microsoft not to engage with Yahoo’s management is “completely absurd and irresponsible”, “while this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders.”
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