Yahoo said on Saturday it has rejected a joint proposal from Microsoft and activist investor Carl Icahn that would have involved Yahoo selling its search business to Microsoft.
Yahoo said in a statement that it received the proposal on Friday evening and was given less than 24 hours to accept.
The Internet company said the terms proposed by Microsoft and Icahn were inferior to Yahoo’s existing search advertising agreement with Google Inc, and would have precluded a potential sale of all of Yahoo for a full and fair price.
Source- reuters
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Yahoo was hit with a one-two punch Monday–first a right jab from Carl Icahn, which is calling for the removal of Yahoo’s entire board, and then a left hook from Microsoft, which confirmed its support for Icahn’s proxy fight and said it’s interested in negotiating a deal with a "new" Yahoo board.
Microsoft, in its public statement, said it could see the value in a potential Yahoo deal, to either purchase the ’search’ function with large financial guarantees, or alternatively, purchase the whole company–a been there, done that attempt with Yahoo’s existing board.
Yahoo counterpunched later Monday morning, issuing a statement (given here in its entirety) expressing its interest in talking to Microsoft about a buyout of the entire company, if only someone would make an actual offer, and the right kind of offer:
Yahoo!’s Board of Directors continues to stand ready to enter into negotiations with Microsoft Corporation for an acquisition of Yahoo!. Indeed, as recently as June, Yahoo!’s independent directors and management approached Steve Ballmer about just such a transaction, only to be told that Microsoft was no longer interested even in the price range which they had previously proposed. Now Mr. Ballmer and Mr. Icahn have teamed up in an apparent effort to force Yahoo! into selling to Microsoft its Search business at a price to be determined in a future "negotiation" between Mr. Icahn’s directors and Microsoft’s management. We feel very strongly that this would not lead to an outcome that would be in the best interests of Yahoo!’s stockholders. If Microsoft and Mr. Ballmer really want to purchase Yahoo!, we again invite them to make a proposal immediately. And if Mr. Icahn has an actual plan for Yahoo! beyond hoping that Microsoft might actually consummate a deal which they have repeatedly walked away from, we would be very interested in hearing it.
Source- CNet Blog
Microsoft Corp on Monday said it would be willing to reopen talks to buy all or part of Yahoo Inc, but only if a new Yahoo board is elected, a major boost for investor Carl Icahn’s board slate.
Microsoft, which broke off talks in early May to buy the Internet company for $47.5 billion, said it would enter into talks immediately if a new board were elected at Yahoo’s August 1 stockholder meeting.
Billionaire financier Icahn, a major Yahoo shareholder who is running a slate of candidates to replace the Yahoo board, said in an open letter released on Monday that he had spoken frequently with Microsoft CEO Steve Ballmer over the last week.
"Steve made it clear to me that if a new board were elected, he would be interested in discussing a major transaction with Yahoo," including purchasing either its "search" function with large financial guarantees, or an outright purchase of Yahoo, said Icahn.
Source- Reuters
Yahoo! has responded to the Microsoft announcement that it has withdrawn its bid and will not pursue a proxy takeover attempt:
Roy Bostock, Chairman of Yahoo! Inc. a leading global Internet company issued the following statement today in response to Microsoft Corporation’s announcement that it has withdrawn its proposal to acquire Yahoo!:
"We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets. From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft’s offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view. Yahoo! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making. Today, Yahoo! has:
– a refined strategic focus to drive enhanced volume and yield;
– reorganized to focus its efforts on its most promising products and services;
– invested in innovations designed to revolutionize display advertising and facilitate closing the competitive gap in search; and
– enhanced expense and resource management to support improved profitability."
Jerry Yang, co-founder and chief executive officer, Yahoo! Inc. added, "I am incredibly proud of the way our team has come together over the last three months. This process has underscored our unique and valuable strategic position. With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users."
Source- Yahoo Press Release
Microsoft Corp. today announced that it has withdrawn its proposal to acquire Yahoo! Inc.
“We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole. Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees,” said Steve Ballmer, chief executive officer of Microsoft.
“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer. After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” said Ballmer.
“We have a talented team in place and a compelling plan to grow our business through innovative new services and strategic transactions with other business partners. While Yahoo! would have accelerated our strategy, I am confident that we can continue to move forward toward our goals,” Ballmer said.
“We are investing heavily in new tools and Web experiences, we have dramatically improved our search performance and advertiser satisfaction, and we will continue to build our scale through organic growth and partnerships,” said Kevin Johnson, Microsoft president for platforms and services.
source- Microsoft Press Release
Chief Executive Officer of Microsoft Corp, Steven Ballmer was adamant and refused to raise its $44.6 billion offer for Yahoo! Inc. The CEO of Washington-based Microsoft said, “We know what Yahoo is worth to us. We offered a lot of money: $44 billion. It is not a lot of euros anymore. If their board thinks that’s fair, great. If not, we’ll move forward,"
Ballmer did clarify as to what he meant by ‘moving forward’. He however clarified that Microsoft would not make a bid for Google primarily for regulatory reasons.
Yahoo! has four days before Microsoft’s deadline to agree to its offer or face a hostile takeover fight and risk a lower bid. Earlier Yahoo! had rejected Microsoft’s offer and had argued that it’s worth more than the $31 a share in cash and stock that the latter offered. Yahoo! management and directors have said Microsoft’s cash-and-stock offer "significantly" undervalues their company.
Meanwhile, Yahoo! also announced its first-quarter financial results on April 22nd. These results were closely watched as these could make a statement in themselves and coax Microsoft for a higher bid. Revenue, excluding the amount paid to advertising partners, rose to $1.35 billion. That beat forecasts of $1.32 billion.
After the results, CEO and co-founder Jerry Yang reinforced that the Microsoft bid was low and said, "The quarter’s results underscore the fact that our strategy and investments are beginning to pay off. Our board and management are committed to choosing a path to maximize stockholder value and will not enter into any transaction that does not recognize the full value of this company."
Are these results good enough to compel Microsoft shell out a higher amount? At least Steven Ballmer does not think so. He has already threatened to take the proposal straight to shareholders if Yahoo doesn’t agree to its terms by April. 26. Prior to the declaration of the results, e had said, "I wish Yahoo all the success with its results, but it doesn’t affect the value of Yahoo to Microsoft."
Microsoft fell 17 cents, or 0.6 percent, to $30.25 in Nasdaq Stock Market trading yesterday. The shares have fallen 15 percent this year. Yahoo fell 1 cent to $28.54 yesterday and the stock has risen 23 percent this year.
Source- TheMoneyTimes
As Yahoo gears up to report its first quarter performance next week, one analyst predicts the Internet search pioneer may clock in at the lower end of its revenue range, while other analysts predict a buyout deal with Microsoft may be in the mix this week. UBS Securities analysts predict the Internet search pioneer will likely saddle up with Microsoft in a buyout deal valued in the range between $32 to $35 a share.
UBS analysts Benjamin Schachter and Heather Bellini noted they wouldn’t be surprised if the two companies entered a deal this week, citing several drivers. In part, the analysts, citing a discussion with litigation attorney Glenn Manishin of Duane Morris LLP, predict Yahoo’s antitrust concerns in hooking up with Microsoft are largely unfounded, giving it a mere 15 to 25 percent chance regulators would block the deal.
source: C|Net News
Yahoo! Inc. and Time Warner Inc.’s AOL are close to striking a deal to combine their Internet operations, the Wall Street Journal reported, citing people familiar with the situation.
Yahoo would also propose buying billions of dollars of its own stock and is negotiating to display Internet search ads from Google, the Wall Street Journal said.
Under the terms of the deal, Time Warner would combine its Internet unit with Yahoo and take a 20 percent stake in the combined company, the Journal said. Yahoo would buy back its shares at a price between $30 and $40 a share, the newspaper said.
A final agreement would be offered to Yahoo shareholders for approval, the Journal said, citing the unidentified people.
Source- Bloomberg
Ankur Mittal | July 13, 2008
