The internet giant Yahoo rejected a restructuring proposal put forward by Microsoft and the activist shareholder Carl Icahn at the weekend, claiming it had "anything but the interests of Yahoo's stockholders in mind".
Mr Icahn and Microsoft approached Yahoo on Friday, giving it just 24 hours to respond to a plan which would have seen Microsoft pick up Yahoo's core search engine business, while leaving the remainder to be bought by Mr Icahn.
In a statement released at the weekend, Yahoo said its existing business, complemented by a recently signed commercial agreement with Google, was worth more to shareholders than the Microsoft/Icahn proposal. It added that a sale of its search engine business would also preclude a potential sale of the Yahoo group at a full and fair price – a transaction which it believes could be negotiated and completed before the beginning of next month.
"Clearly, Microsoft, having failed to advance in search, is aligning with the short-term objectives of Mr Icahn to coerce Yahoo into selling its core strategic search assets on terms that are highly advantageous to Microsoft, but disadvantageous to Yahoo stockholders," said Roy Bostock, Yahoo's chairman. "Yahoo's board of directors will not allow that to happen.
"After negotiating among themselves without the involvement of Yahoo, Carl Icahn and Microsoft presented us with a 'take it or leave it' proposal ... giving us less than 24 hours to respond. It is ludicrous to think our board could accept such a proposal. While this type of erratic and unpredictable behaviour 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."
Mr Icahn has been a vocal critic of the Yahoo management in recent weeks after the company knocked back a bid of $33 a share from Microsoft to buy the business outright. In its statement, Yahoo said it was willing to talk to Microsoft about a sale of the whole business for "at least $33 a share". But Microsoft has said it is no longer interested in a bid for Yahoo, as long as the current board is in place.Reuse content