Yahoo! accuses Microsoft and Icahn of sabotage

Stephen Withers
Friday, 18 July 2008 03:55

Opinion and Analysis

They're also making a big deal of Icahn's lack of working knowledge of running a company like Yahoo!, quoting him as saying "Technology hasn't really been one of the things I've focused on too much before" and "It's hard to understand these technology companies."

But the letter makes it crystal clear that the Yahoo! board would recommend a sale to Microsoft, but at $US33 per share and on terms that deliver certainty of value (which presumably means an all-cash offer) and certainty of closing.

The idea of Microsoft acquiring just Yahoo!'s search business is still on the table, but the board wants a deal that "provides real value to our stockholders and resolves the substantial execution and operational risks". If they are prepared to set an outright sale price of $US33 per share, why aren't we seeing an asking price for the search division? My guess is that the present board strongly favours continuing as an integrated company, and it would take a very strong bid to shake search loose.