Monday, 14 July 2008

Yahoo! Rejects “odd” proposal from Microsoft & Icahn

Yahoo confirmed Sunday that it has rejected a joint proposal from Microsoft Corp. and Financier Carl Icahn-- one that requires the removal of half of Yahoo!'s business from Yahoo! and then the integration of it into Microsoft-- calling it “completely absurd and irresponsible”.

The proposal was apparently extended on Friday evening, giving the internet search giant less than 24 hours to decide if it is agreeable to selling its search and display businesses.

"This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo!'s stockholders in mind. Clearly, Microsoft, having failed to advance in search, is aligning with the short-term objectives of Mr. Icahn to coerce Yahoo! into selling its core strategic search assets on terms that are highly advantageous to Microsoft, but disadvantageous to Yahoo! stockholders,” said Roy Bostock, Chairman of Yahoo.

“Yahoo's Board of Directors will not allow that to happen. Yahoo!'s Board remains open to any transaction that delivers full value to our stockholders - we just do not believe such a transaction should be dictated by Microsoft and a single short-term investor."

Yahoo said that whilst a transaction that would separate the Company's search assets is an undertaking of great complexity, it is still open to a full acquisition which would be much more straightforward and involve far less risk.

“It is ludicrous to think that our Board could accept such a proposal. 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." said Mr. Bostock.

"Microsoft and Mr. Icahn are trying to dismantle the Company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo! stockholders. We are prepared to let our stockholders, not Microsoft and Carl Icahn, decide what is in their best interests and we look forward to the upcoming vote."

This marks another failed attempt in an already long list of attempts on Microsoft’s part to initiate an acquisition of Yahoo.