Yahoo rebuffs Microsoft, says open to better deal
Yahoo Inc., responding to a three-week deadline issued by Microsoft Corp. to accept its $42 billion takeover bid, again rejected the deal for undervaluing the web pioneer. In a defiant open letter to Microsoft chief executive officer Steve Ballmer,...
Yahoo Inc., responding to a three-week deadline issued by Microsoft Corp. to accept its $42 billion takeover bid, again rejected the deal for undervaluing the web pioneer.
In a defiant open letter to Microsoft chief executive officer Steve Ballmer, Yahoo said the software giant's threat of a proxy battle was counter-productive and Yahoo would be open only to a better deal.
"Our board's view of your proposal has not changed," said the letter, signed by Yahoo chairman Roy Bostock and chief executive officer Jerry Yang. "We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders."
Mr Ballmer on Saturday set a three-week deadline for Yahoo to agree to its cash-and-stock offer or risk seeing the bid lowered, citing a deteriorating economy and market for internet stocks as well as a decline in Yahoo's share of the web search and advertising business.
Yahoo countered that its business is in good shape and suggested the software giant should look to the value of its own enterprise.
"As a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal," Yahoo's letter said.
When Microsoft first announced its bid on February 1, the deal valued Yahoo at $31 per share, or $44.6 billion in total, representing a 62 per cent premium to Yahoo's market price.
If the two sides can agree to a deal, it would be the biggest takeover in the high-tech industry. Directors of Sunnyvale, California-based Yahoo continue to explore alternatives, the company said. Talks on a potential alliance with Time Warner Inc.'s AOL have intensified, according to a person familiar with the matter.
Yahoo shareholders and analysts say the company's best options are to find an ally to help demonstrate Yahoo is worth more as an independent player, or surprise the market with a strong show in its quarterly results on April 22.
But the consensus on Wall Street is that no "white knight" will emerge to whisk Yahoo away from Microsoft and its proposed cash-and-stock offer currently valued at $42.2 billion.
Yahoo's Mr Yang also criticised Microsoft for not providing it with data that would help the companies identify regulatory issues that might be associated with any merger. Yahoo said it has already provided Microsoft with such details.
In the meantime Microsoft Corp. co-founder Bill Gates said he expected the new version of Windows operating software, code-named Windows 7, to be released "sometime in the next year or so".
The software giant has been aiming to issue more regular updates of the operating system software that powers the majority of the world's personal computers. Nevertheless, Mr Gates' comments suggested that a successor to the Vista programme might be released sooner than was generally expected.
In a defiant open letter to Microsoft chief executive officer Steve Ballmer, Yahoo said the software giant's threat of a proxy battle was counter-productive and Yahoo would be open only to a better deal.
"Our board's view of your proposal has not changed," said the letter, signed by Yahoo chairman Roy Bostock and chief executive officer Jerry Yang. "We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders."
Mr Ballmer on Saturday set a three-week deadline for Yahoo to agree to its cash-and-stock offer or risk seeing the bid lowered, citing a deteriorating economy and market for internet stocks as well as a decline in Yahoo's share of the web search and advertising business.
Yahoo countered that its business is in good shape and suggested the software giant should look to the value of its own enterprise.
"As a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal," Yahoo's letter said.
When Microsoft first announced its bid on February 1, the deal valued Yahoo at $31 per share, or $44.6 billion in total, representing a 62 per cent premium to Yahoo's market price.
If the two sides can agree to a deal, it would be the biggest takeover in the high-tech industry. Directors of Sunnyvale, California-based Yahoo continue to explore alternatives, the company said. Talks on a potential alliance with Time Warner Inc.'s AOL have intensified, according to a person familiar with the matter.
Yahoo shareholders and analysts say the company's best options are to find an ally to help demonstrate Yahoo is worth more as an independent player, or surprise the market with a strong show in its quarterly results on April 22.
But the consensus on Wall Street is that no "white knight" will emerge to whisk Yahoo away from Microsoft and its proposed cash-and-stock offer currently valued at $42.2 billion.
Yahoo's Mr Yang also criticised Microsoft for not providing it with data that would help the companies identify regulatory issues that might be associated with any merger. Yahoo said it has already provided Microsoft with such details.
In the meantime Microsoft Corp. co-founder Bill Gates said he expected the new version of Windows operating software, code-named Windows 7, to be released "sometime in the next year or so".
The software giant has been aiming to issue more regular updates of the operating system software that powers the majority of the world's personal computers. Nevertheless, Mr Gates' comments suggested that a successor to the Vista programme might be released sooner than was generally expected.