San Francisco - Microsoft handed a huge boost to Yahoo's
rebel shareholders Monday saying it was open to a 'major transaction'
with the company if the board is replaced at next month's annual
meeting.
In a statement Monday Microsoft said it would not hold any further
talks with the current Yahoo board. 'We have concluded that we cannot
reach an agreement with them,' the company said in its statement.
Talks between the two companies broke down in May after Yahoo
rejected Microsoft's 47.5 billion dollar takeover bid as undervaluing
the company. That led activist investor Carl Icahn to launch a proxy
shareholder war to oust the board and company founder and CEO Jerry
Yang, arguing that they deliberately failed to maximize shareholder
value by sabotaging the talks with Microsoft.
Microsoft's bid had valued the company at 33 dollars per share, a
premium of more than 60 per cent over Yahoo's pre-bid price. The
share price has hovered around 20 dollars since the collapse of the
deal but news of Microsoft's conditional new interest sent shares to
23 dollars in early trading Monday.
In its statement Microsoft also said that it had held talks with
Icahn - whose insurgency will come to a head in a shareholder meeting
on August 1, at which Icahn is attempting to get his own board slate
elected.
In his own statement Monday, Icahn said Microsoft feels it cannot
negotiate with the current board of Yahoo under fear that the board
would 'mismanage' the company and hurt the value of the business.
He said while Microsoft perceives the risk to be 'quite high' with
Yahoo's current board and management, Mr. Ballmer 'made it clear to
me' that he would be interested in discussing a major deal with Yahoo
if a new board were elected.
Icahn said that if his slate is elected the new board would in
'very short order' present to shareholders either a purchase offer
for the whole company or a 'very attractive offer' to purchase the
search assets with large guarantees. He also reiterated that a new
board would also move 'expeditiously' to replace Yahoo CEO Jerry
Yang.
USA
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