Microsoft says it would deal with new Yahoo board

Microsoft says it would deal with a new Yahoo board in its ongoing effort to acquire part or all of the company.

In a statement Monday, Microsoft confirmed that it would be interested in resuming talks with Yahoo with a new board of directors, both to buy the search business or the entire company.

Billionaire investor Carl Icahn, who has been pushing for a deal with Microsoft and has proposed a new slate of Yahoo directors, also issued a letter Monday, confirming that he has discussed the scenario "frequently" during the past week with Microsoft CEO Steve Ballmer and other executives.

Yahoo officials were not immediately available for comment.

In its statement, Microsoft said that, after Yahoo's shareholder meeting this quarter, it would be "interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company."

Microsoft also noted that it talks with the current board have reached an impasse. "Despite working since January 31 of this year, as well as in the early part of last year, we have never been able to reach an agreement in a timely way on acceptable terms with the current management and Board of Directors at Yahoo!," Microsoft's statement said. " We have concluded that we cannot reach an agreement with them."

Ballmer expressed worry that the current board could mismanage the company during the months it would take for a sale to gain regulatory approval, putting Microsoft's investment at risk, according to Icahn.

Icahn has nominated a number of candidates to be named to the board at the company's August shareholder meeting. In the letter, he said he has "little doubt" that a new board will immediately begin negotiations with Microsoft and "move expeditiously" to replace current CEO Jerry Yang "with a new CEO with operating experience."

"There is no need to keep pointing out the mistakes I believe Yahoo! made by not immediately taking a US$33 offer made by Microsoft. But one thing is clear -- Jerry Yang and the current board of Yahoo! will not be able to 'botch up' a negotiation with Microsoft again, simply because they will not have the opportunity," Icahn wrote.

"Our company is now moving toward a precipice," he added. "It is currently losing market share in its 'Search' function; our current Board has failed to bring in a talented and experienced CEO to replace Jerry Yang and return Jerry to his role as Chief Yahoo!, and currently it is witnessing a meaningful exodus of talent."

Microsoft first made an unsolicited offer to buy Yahoo earlier on February 1 -- a US$44.6 billion cash-and-stock deal that offered shareholders a 62 per cent premium over Yahoo's stock price the day before of US$19.18.

But 10 days later, Yahoo's board rejected that offer, saying it undervalued the company. That day, February 11, Yahoo's stock closed at almost US$30.

Microsoft later increased its offer to US$33 per share, or about US$47.5 billion, but Microsoft eventually walked away from the negotiations on May 3 after the two sides failed to agree on a price.

Since then, Microsoft officials have repeatedly said the company isn't interested in acquiring all of Yahoo. Later, Microsoft did offer to buy Yahoo's search advertising business, but those negotiations also fell through. Yahoo instead struck a more limited deal to outsource part of its search ad business to Google.

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Show Comments

Essentials

James Cook University - Master of Data Science Online Course

Learn more >

Mobile

Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >

Exec

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?