Yahoo! says no to Microsoft - again

Stephen Withers
Tuesday, 08 April 2008 02:53

IT Industry - Strategy

The Yahoo! board has again rebuffed Microsoft's acquisition proposal.

Microsoft recently gave Yahoo!'s board three weeks to enter into a definitive acquisition agreement or face a proxy battle.

In a reply signed by CEO Jerry Yang and chairman Roy Bostock, the board again rejected Microsoft's proposal, saying it undervalues the company and is still not in the best interests of Yahoo! or its shareholders.

As for the threatened proxy battle, the rejection seems to say 'bring it on': "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!," wrote Bostock and Yang.

"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. We are confident that our stockholders understand that our independent Board is best positioned to objectively and knowledgeably evaluate our Company's alternatives and to maximize value", they added.

The Yahoo! board also shrugs off the changes in market conditions since the bid was originally made.