On Jan. 31, Microsoft offered to acquire Yahoo for US$44.6 billion, or US$31 per share, in cash and stock. Yahoo's board rejected the offer, which has since declined in value to US$29.36 per share because of a substantial drop in Microsoft's share price.
"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," wrote Microsoft's chief executive, Steve Ballmer in an open letter sent to Yahoo!'s board on Saturday.
Breaking nearly two months of silence since Yahoo's board rejected Microsoft's buyout offer, Ballmer reiterated Microsoft's opinion that its offer was "generous" and said the company had expected that a deal would be struck swiftly.
"Despite this, the pace of the last two months has been anything but speedy," he wrote.
In his letter, Ballmer warned that if Yahoo was unable to come to terms with Microsoft’s proposal within the next three weeks, Microsoft would be compelled to take its case directly to shareholders, including the initiation of a proxy contest to elect an alternative board of directors.
Since rejecting Micorosft’s offer as too low, Yahoo has been biding its time in the hopes of a better offer or the opportunity to partner with another company to save it from Microsoft’s bid. Although speculation mounted around a possible merger with AOL, Yahoo has so far been unable to negotiate another deal.
Microsoft has pursued Yahoo for more than a year, arguing that combining their consumer services and internet advertising efforts would provide the best challenge to Google.
Microsoft issues Yahoo a three week deadline
By Staff Writers on Apr 7, 2008 3:35PM