Microsoft and billionaire investor Carl Icahn presented Yahoo! with an offer to buy the companyis Internet search business over the weekend, and Yahoo! rejected the deal outright. The Internet search and information company was given only 24 hours to respond to the non-negotiable offer, and Yahoo! didnit waste any time telling the buyout team to get lost.
"Carl Icahn and Microsoft presented us with a itake it or leave iti proposal under which we would be required to restructure the Company, hand over to Microsoft Yahoo!is valuable search business and to Carl Icahn the rest of the Company, giving us less than 24 hours to respond," said Yahoo! Chairman Roy Bostock. "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."
Apparently the offer would have split Yahoo! apart, giving Microsoft exactly what it wants -- Yahoo!is Internet search advertisement business -- and leave the rest for Mr. Icahn to do with as he pleases.
Mr. Bostock added "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."
Microsoft has been met with a series of rejections from Yahoo! starting earlier this year when the search company declined to accept an unsolicited buyout offer. The Windows Vista maker was hoping to buy Yahoo! to get the companyis Interent search technology to shore up its own lagging efforts in the market and go after Googleis number one position.
The two companies failed to reach an agreement and Microsoft walked away from the table after claiming the deal was no longer worth its time or investment.
Carl Icahn, well known for pushing company mergers that he finds profitable, then threw his hat into the ring after saying that Yahoo! bungled the buyout offer. He put together his own pro-Microsoft proxy board with plans to push a hostile takeover attempt at Yahoo!is shareholder meeting in August.
Microsoft had been hinting that it supported Mr. Icahnis actions, but now that the two have presented a joint proposal, it looks like Microsoftis involvement with Mr. Icahn is more than just idle approval.
"This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo!is stockholders in mind," Mr. Bostock said. "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."