Unperturbed by ultimatum, Yahoo! again rejects Microsoft offer

April 7th, 2008 - 9:51 pm ICT by admin  

New York, April 7 (IANS) In what is turning out to be a titanic battle of wits, Yahoo! responded Monday to Microsoft’s ultimatum on takeover, again rejecting the buyout offer as too low, but saying the internet portal is open to the software giant’s deal if it “is superior to our other alternatives”. Yahoo! was responding to a letter Saturday from Microsoft’s chief executive Steven Ballmer threatening to take the offer directly to Yahoo! shareholders and to lower the offer price if the two companies failed to reach a negotiated deal in the next three weeks.

In a letter addressed to Ballmer made public Monday, the Yahoo! board said, “We continue to believe that your proposal is not in the best interests of Yahoo! and our stockholders. 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!”

The letter added: “We consider your threat to commence an unsolicited offer and proxy contest to displace our independent board members to be counterproductive and inconsistent with your stated objective of a friendly transaction.”

Senior executives from the two companies have met twice since Microsoft made its offer public Feb. 1, the offer which was rejected by Yahoo!

Although Microsoft’s offer was initially valued at $31 a share, a drop in the price of its shares has reduced the offer to just more than $29 a share, amounting to $42.2 billion.

“We are open to all alternatives that maximise stockholder value,” Yahoo!’s letter further said. “This includes a transaction with Microsoft if it represents a price that fully recognises the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing.”

For its part, Microsoft is in no mood to raise its bid, mainly because Yahoo has no competing offers.

Microsoft wants Yahoo! in its fold to be able to compete with Google in internet search and other services

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