Yahoo! 'mischaracterised' proposal, says Microsoft

Stephen Withers
Tuesday, 15 July 2008 07:41

IT Industry - Listed Tech

Yes, they can - if you treat Bostock's statement as a threat that the board and senior executives would resign if the acquisition went ahead, or that they would need to be ousted before such a deal could proceed.

Bostock previously claimed that Icahn and Microsoft had been negotiating among themselves, while Microsoft says Icahn and Yahoo! were the ones that had got together. Which version will shareholders believe? More importantly, will it make any difference to whether they re-elect the existing board or opt instead for Icahn's slate of potential directors?

Microsoft's claims puts a different light on the weekend's proceedings. It would be amazing if both parties failed to record Friday's conversation between Bostock and Ballmer, so surely one or the other will release a full transcript to shareholders ahead of the annual meeting scheduled for August 1.

What if shareholders declare "a pox on both your houses" by voting out the current board, installing Icahn's team, but then turn down any proposed deal that doesn't deliver what they see as full value? Given Yahoo!'s share price is still trendng down from its late 2005 peak of over $US42 to yesterday's close of $US22.57, it doesn't look like there is much hope of a deal being reached.

The interplay between Microsoft and Yahoo!, two juggernauts in their respective spaces who have lately demonstrated flagging fortunes, smacks of desperation to reinvent themselves through merger in order to provide a viable online competitor to the seemingly ever-prospering Google.