Source: Xinhua News Agency

07-14-2008 09:21

LOS ANGELES, July 13 (Xinhua) -- A joint proposal by Microsoft and activist investor Carl C. Icahn to buy out Yahoo has been rejected.

People walk past Yahoo! offices in Santa Monica, California, May 19, 2008. A joint proposal by Microsoft and activist  investor Carl C. Icahn to buy out Yahoo has been rejected. (Xinhua/Reuters File Photo)

In a statement issued Saturday night, Yahoo said it had rejected the proposal which was substantially similar to a previous offer that Yahoo had turned down.

The new proposal was made Friday evening by Icahn and Steven Ballmer, Microsoft's chief executive.

This came two months after the software giant withdrew its 47.5-billion-dollar takeover offer.

According to the terms of the new plan, Yahoo was to have sold its search business to Microsoft. But this time, Icahn, who is waging a campaign to unseat Yahoo's current board, would take over the remaining parts of the company.

Icahn, who has been challenging corporate boards for more than two decades, owns a roughly 5 percent stake in Yahoo and hopes to make a profit by pushing the company's stock price above 30 dollars.

Microsoft said last Monday that it would be open to making another offer to buy part or all of Yahoo -- if its current board were ousted.

Icahn and Ballmer gave Yahoo 24 hours to make a decision, according to Yahoo's statement. After a four to five hour meeting with its financial and legal advisers, Yahoo's board decided to reject the offer.

"It is ludicrous to think that our board could accept such a proposal," Roy Bostock, Yahoo's chairman, said. "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."

In another indication of the animosity between the two companies, Bostock said Microsoft has taken the "completely absurd and irresponsible" stance of refusing to hold any further talks with Yahoo's current board and management.

Yahoo said the proposal that Microsoft submitted Friday "contains a number of improvements," but insisted it still wasn't good enough.

Yahoo reiterated that it was open to a sale of the whole company at 47.5 billion dollars, or 33 dollars per share, a price that Microsoft had spurned.

It also said it would accept a sale of its search business, but on better terms. Yahoo has already struck a search advertising partnership with Google, one it could break by paying a breakup fee.

By relying on Google's superior technology to show some ads alongside the search results on its Web site, Yahoo expected to boost its annual revenue by about 800 million dollars.

But Yahoo's alliance with Google is subject to close scrutiny by antitrust regulators because the two companies together control more than 80 percent of the U.S. search advertising market.

To accommodate the review, Yahoo and Google have voluntarily agreed to wait until late September to begin working together.

There was no immediate comment from Microsoft or Icahn.

 

Editor:Yang Jie