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Yahoo turns down Microsoft/Icahn search bid

updated 01:25 am EDT, Sun July 13, 2008

Yahoo Declines MS Icahn

Yahoo late Saturday revealed that it has rejected a purportedly aggressive joint bid proposed by Microsoft and investor Carl Icahn. The deal would have seen both the Windows developer and Icahn buy Yahoo's search business and significantly restructure Yahoo to potentially improve its remaining businesses, including the replacement of the board of directors with Icahn's own slate and remove the "top management team" at the company, which most observers believe would include Yahoo chief Jerry Yang as well as others known to have opposed any of Microsoft's earlier offers for takeovers and partial buyouts.

Chairman Roy Bostock of Yahoo completely dismisses the deal as entirely unreasonable, arguing that the conditions of talks were unrealistic. Yahoo was given just 24 hours to respond to the deal and was told there would be no negotiation for the terms of the deal even after suggesting an improved search-only deal that it hasn't mentioned before, according to the executive.

"It is ludicrous to think that our Board could accept such a proposal," Bostock says. "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."

The exact value of the deal isn't mentioned in the official response but is characterized as generating money at a level "well below" what Yahoo expects to gain either on its own or the recently struck Google AdSense deal. It also priced the cost of picking up Yahoo's visitor traffic significantly below an asking market price, according to the statement.

The firm also believes that agreeing to the terms set by Icahn and Microsoft would put the company at great risk regardless of the financial terms. It would block any complete takeover deal in the future, render the company unstable and put in place a new group of executives that has "virtually no working knowledge" of how Yahoo works, the search firm adds. The company claims that a full takeover would be a better value and much less complex than what has been proposed in the past day.

Neither Microsoft nor Icahn has commented on the matter, though the news confirms direct teamwork between Icahn and Microsoft. The latter has claimed that it doesn't want to unfairly influence an upcoming Yahoo shareholders meeting on August 1st but has strongly suggested that it would be open to taking over Yahoo if Icahn wins a vote to replace the Yahoo board, putting pressure on investors to vote for Icahn's motion to oust Yang and his current directors.



By Electronista Staff
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Comments

  1. Tim_s

    Fresh-Faced Recruit

    Joined: Jul 2006

    +5

    stupid microsoft

    Why is it that when Microsoft can't win at something, they try to buy the competitor, and when they can't do that, they try to destroy the competitor?

    Why does anyone do business with such a piece of sh** company?

  1. BelugaShark

    Fresh-Faced Recruit

    Joined: Aug 2007

    0

    Icahn is stupid

    I'm really starting to like Yahoo now.

  1. horvatic

    Fresh-Faced Recruit

    Joined: Apr 2002

    +1

    How many times to say NO!

    How many times does Yahoo have to say NO!!! Icahn is in this for quick retirement money, not to make anything from Yahoo. Microsoft would destroy Yahoo and it would eventually fade to black. With Google at least it will have some kind of chance. I don't think Microsoft has what it takes to make Yahoo anything better, and certainly doesn't have what it would take to beat Google period.

  1. luckyday

    Fresh-Faced Recruit

    Joined: Apr 2008

    -2

    Dear fanboys

    I don't think Icahn needs quick retirement money. He is worth over 14 billion and the 46th richest man in the world.

    I think the three of you should re-read your posts and really think about what you're saying. It's embarrassing. Really.

  1. Feynman

    Forum Regular

    Joined: Aug 2006

    +1

    Just think...

    ...if MS does not take over Yahoo...I wonder what platform all of Yahoo's computers will be running :)

  1. jerryfrit

    Fresh-Faced Recruit

    Joined: Feb 2004

    +1

    Icahn wants...

    ...to do for Yahoo what he did for TWA.

  1. jerryfrit

    Fresh-Faced Recruit

    Joined: Feb 2004

    0

    Icahn wants...

    ...to do for Yahoo what he did for TWA.

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    0

    Bill Gates buys news

    I can't believe no one is mentioning that Bill Gates, through his foundation, is buying up many news media companies. Yahoo news is the target.

    Icahn and his proposed board are just the strong arms.

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