Monday, April 7, 2008

Yahoo Wants Better Deal


Internet giant Yahoo Inc, officially opposed a deal today with the world's largest software maker, Microsoft. This decision comes after a statement by Microsoft over the weekend, warning Yahoo that if a deal isn't reached by April 26th, it will begin a hostile takeover at a less attractive price.

Microsoft's initial offer for Yahoo, made on February 1st, was valued at $44.6 billion, 62 percent above Yahoo's market value. As of Friday, the deal dropped to just under $41 billion.

Yahoo's executive board formally rejected Microsoft's bid on February 11th, saying that it undervalues the company.

"We are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders," said Yahoo Chief Executive Jerry Yang and Chairman Roy Bostock in a letter to Microsoft CEO Steve Ballmer. "Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders."

Since rejecting Microsoft's bid, Yahoo has looked at exploring alliances with Google Inc., MySpace.com, and AOL, but no offers have surfaced.

Ballmer acknowledged the other negotiations, but wondered why Yahoo was still dragging its heels when they have another offer on the table.

"This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares," Ballmer wrote in the letter.

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