Microsoft CEO Steve Ballmer has given Yahoo’s board three weeks to approve Microsoft’s $44.6 billion bid for Yahoo. If the board doesn’t sign off on the bid, Ballmer said Microsoft will take its case to Yahoo’s shareholders.
“The substantial premium reflected in our initial proposal anticipated a friendly transaction with you,” Ballmer wrote to Yahoo’s board members. “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.”
Yahoo CEO Jerry Yang and chairman Roy Bostock, in a statement today, reiterated that Microsoft’s bid undervalues Yahoo. They insisted they aren’t opposed to Microsoft taking over Yahoo — they just want the bid to reflect Yahoo’s value.
Since Microsoft made the bid two months ago, Ballmer said the public equity markets and overall economic conditions have weakened. “At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly,” he wrote.
In response, Yahoo’s executives replied that the company has continued to launch new products and to take actions “that leverage our scale, technology, people and platforms as we execute on the strategy we publicly articulated.”
The Yang-Bostock letter takes a personal tone. “We regret to say that your letter mischaracterizes the nature of our discussions with you,” they wrote. “Moreover, Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit.”
Plus, Yang and Bostock point out that Microsoft’s stock price has declined since its bid, meaning that the value of Microsoft’s proposal is lower than it was two months ago.
On Friday, Bloomberg.com reported that Microsoft may cut its $44.6 billion bid for the company, suggesting the economic slowdown could hurt Yahoo’s business.
Earlier Friday, Reuters said Microsoft was “evaluating” its bid to purchase the company. Reuters, quoting unnamed sources, pointed out that Yahoo has lost key personnel since Microsoft made its Jan. 31 offer, plus other factors.
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