Yahoo again rejects Microsoft offer as too low
Yahoo criticizes Microsoft's weekend attempt to move the takeover proposal along. But the company says it remains open to a deal with the software giant if no better alternatives emerge.
SAN FRANCISCO -- For the second time in two months, Yahoo Inc. today spurned the unsolicited takeover bid from Microsoft Corp., insisting the offer was too low.
But Yahoo said it remained open to a deal with the software giant if no better alternatives emerge to benefit shareholders.
The Sunnyvale, Calif.-based Internet pioneer responded before the opening bell to a letter sent Saturday by Microsoft Chief Executive Steve Ballmer. The missive was designed to raise pressure on Yahoo directors by warning that Microsoft would take its buyout offer directly to Yahoo shareholders and probably lower the price if the two companies did not negotiate a deal in the next three weeks.
Yahoo CEO Jerry Yang and Chairman Roy Bostock fired back today, saying Microsoft was being "unconstructive." Yahoo said its board's "view" of the proposal had not changed and that the tone of Ballmer's letter undermined the "friendly" approach that he had claimed to be taking.
"We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders," Yahoo said in the statement.
Yahoo also said that stockholders representing a "significant" portion of outstanding shares have "indicated" that the Microsoft proposal "substantially undervalues" Yahoo.
"We are open to all alternatives that maximize stockholder value," Yahoo said in its statement. "To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing."
Executives from the two companies have met twice since Microsoft made its offer public on Feb. 1, but have not engaged in formal negotiations. A drop in the price of Microsoft shares has reduced the offer to about $29 a share from its initial value of $31 a share.
Yang and Bostock rejected Ballmer's view that Yahoo has refused to negotiate and pointed out that Ballmer attended both meetings of the company's executives. Rather, they wrote, "We have had constructive conversations together regarding a variety of topics, including integration and regulatory issues. Your comment that we have refused to enter into negotiations to conclude an agreement [is] particularly curious given we have already rejected your initial proposal."
