Yahoo Has Again Rejected a Microsoft Proposal

July 14th, 2008 at 12:00 am

yahoo rejects microsoft

Apparently, the iPhone’s launch last Friday kept the covers on this one.  Besides it’s getting tiring to read or even think about after so long.  Anyway, Yahoo shareholder activist Carl Icahn has been in talks with both Microsoft and Yahoo trying to get Microsoft to buy Yahoo and Yahoo to bend over.

Another episode in the long running Microhoo series, Yahoo has yet again rejected a Microsoft proposal to buy their search business.  Actually, it was a Microsoft-Icahn proposal.  The new proposal which the Yahoo board decided to throw out last Saturday, only 24 hours after Microsoft has submitted it, was a "sweetened" deal that would grant Microsoft full access to the Yahoo search business and give Yahoo $2.3 billion guaranteed annual revenue for 5 years.

However,  in true classic Yahoo style, these terms were not amicable and according to the Yahoo board, "are not in the best interests of our shareholders."

The very long press release from Yahoo details the reasons for the rejection of the offer.  Which can be dramatically summarized in the words of Yahoo chairman Roy Bostock:  "After negotiating among themselves without the involvement of Yahoo!, Carl Icahn and Microsoft presented us with a ‘take it or leave it’ proposal under which we would be required to restructure the Company, hand over to Microsoft Yahoo!’s valuable search business and to Carl Icahn the rest of the Company, giving us less than 24 hours to respond. 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."