Yahoo snubs Microsoft, again

By Kimberly Guest for Microsoft

Johannesburg, 08 Apr 2008

Nasdaq-listed Yahoo has publicly refused to kowtow to Microsoft's demands that its January offer be concluded within three weeks.

Yahoo chairman Roy Bostock and CEO Jerry Yang yesterday responded to Friday's open letter from Microsoft CEO Steve Ballmer. In a responding open letter, the pair stated the company's view that Microsoft's offer did not represent the fair value of Yahoo remained unchanged.

"Please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximise stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognises the value of Yahoo... We are steadfast in our commitment to choosing a path that maximises stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value," they said.

Waiting game

All eyes have now turned to Microsoft to see if the company will come through on Friday's threat to initiate a proxy contest if the merger is not concluded within three weeks.

This proxy contest, warned Ballmer, would be aimed at electing an alternative slate of directors for Yahoo.

However, Bostock and Yang's response to Ballmer indicates Yahoo shareholders support the company's earlier decision.

"Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo. Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal," they said.