Microsoft issues 3-week deadline to Yahoo
updated 11:35 pm EDT, Sat April 5, 2008
Microsoft 3 Wk Yahoo
Microsoft on Saturday applied pressure to Yahoo by submitting a letter directly to the search engine firm's board of directors, setting a deadline for the company to accept Microsoft's $31 per share takeover offer. Citing deteriorating economic conditions, the Redmond, Washington-based Microsoft refused to increase its bid and gave Yahoo a total of three weeks to accept the $44.6 billion bid as originally made in late January before it would be "compelled" to bypass the board and bring a lower-priced offer directly to Yahoo's shareholders. This will include launching a proxy battle by stepping up pressure to elect a more takeover-friendly board of directors at Yahoo, Microsoft said.
"If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board," the letter read. "The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal."
The letter also claims that Yahoo's value has been damaged in the weeks since the original bid, with the combination of a poor US economy and disappointing results at Yahoo itself diminishing the company's worth. Microsoft also accuses Yahoo of making strategic changes that would sour the potential deal and argues that the northern California company should be appreciative of the bid originally made rather than attempting to force a higher bid.
"By any fair measure, the large premium we offered in January is even more significant today," Microsoft CEO Steve Ballmer said in its letter. "We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects."
Microsoft's communication emphasizes a split between its perception of the deal and Yahoo's reaction, with Microsoft today claiming that its offer assumed a "friendly" response while sources have suggested that the takeover offer fulfilled a threat to take the matter public when Yahoo repeatedly refused to accept Microsoft's terms, which were considered unsolicited by Yahoo. The latter is said to have explored several different alternatives to accepting Microsoft's offer, including potential deals with AOL, News Corp., and other organizations.
Some Yahoo contingents are known to support Microsoft's proposal and are considered the most likely to vote in a new directorial board, including two retirement groups that have filed lawsuits against Yahoo for its decision.
Ha!
04/06, 08:30am reply
Looks like the Yahoo board were right! M$ really want to buy Yahoo and will stop at nothing to get it... If the share holders hold out they will make a fortune!
It's really funny, that a document so aggressive in tone has actually just shown their hand! Ballmer is a Lame business man... Gates would never have let the cat out of the bag like this!
bloodline
Forum Regular
Joined: Jan 2006
yeah seriously
04/06, 12:23pm reply
let us buy you or else we'll offer you less money. That doesn't seem like a good negotiating tactic.
zaghahzag
Dedicated MacNNer
Joined: Aug 2006
the end of ethics...
04/06, 12:49pm reply
Incredible that "..sell us your company or we'll take it by force..." barely raises an eyebrow. Proof if proof were needed that the DOJ should have broken M$ up into smaller companies years ago. Too late now!
Feathers
Forum Regular
Joined: Oct 1999
All the more reason
04/06, 01:19pm reply
to hate Mico-is-soft......Typical Ballmer and Gates. Oh, but yeah, Bill is "helping" the poor, so that makes it O.K......
Why don't you guys worry about fixing Vista first?
Beechlady
Fresh-Faced Recruit
Joined: Oct 2006
dictator
04/06, 01:28pm reply
i cant believe people still support a company that is blatantly bullying like this. good old mikro$oft. this really shows the peecee mentality as also seen with Dell's " what if remarks" about buying apple. makes me hold tight to my mac even if apple experienced another dark time.
Haroscarfel
Fresh-Faced Recruit
Joined: Nov 2007
In other words...
04/06, 02:03pm reply
If Yahoo does not accept this deal, Balmer will be back with Chairs. He's not afraid to use them folks.
that one guy
Fresh-Faced Recruit
Joined: May 2005
Bad News for Yahoo
04/06, 03:22pm reply
MS has some experience in buying public votes. (OOXML ISO votings)
Durandalus
Fresh-Faced Recruit
Joined: Jan 2001
gasps!
04/06, 05:21pm reply
"The solution currently implemented for the problem will bear a strong resemblance to Apple's Classic implementation for Mac OS X."
No, really...??!??!!
ZinkDifferent
Fresh-Faced Recruit
Joined: Jan 2005
wtf?
04/06, 08:32pm reply
who ever heard of a negotiating ploy that goes like this:
"I'll offer you $100 for your widget!"
"It's not for sale, at any price!"
"OK, how about $80?"
Seriously... is there something I don't get here or is Ballmer an idiot? Because that is how it seems this boils down to.
climacs
Fresh-Faced Recruit
Joined: Sep 2001
i think
04/06, 08:35pm reply
this is simply Ballmer's tactic to get the board to accept his current bid... "take it now; I won't offer as much if I have to go around you; really, this is the best deal you're going to get!"
But this tactic can only succeed if Yahoo caves to Ballmer's bluster. If they still turn him down, I can't imagine a single shareholder who would accept LESS than MS' current offer. Neither the economy nor Yahoo is in a significantly worse position than when the offer was first made.
Ballmer is full of s*** and his hardball tactics are going to backfire, big-time.
climacs
Fresh-Faced Recruit
Joined: Sep 2001