Microsoft joins Icahn in Yahoo battle
Software giant backs effort to oust board
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Microsoft confirmed Monday its interest in reopening acquisition talks -- or a possible search deal -- if shareholders tell Jerry Yang & Co. to take a hike on Aug. 1. The confirmation followed Carl Icahn's shareholder letter suggesting as much.
In his letter, Icahn described a series of talks with Microsoft topper Steve Ballmer during the past week, several of which lasted as long as an hour.
"Steve made it abundantly clear that, due to his experiences with Yahoo during the past several months, he cannot negotiate any transaction with the current board," Icahn wrote.
"We have concluded we cannot reach an agreement with them," Microsoft echoed in its follow-up statement.
The tech giant said it "would be interested in discussing with a new board a major transaction" involving either the search biz or entire company.
Icahn, who began buying up Yahoo stock shortly after Microsoft withdrew its $47.5 billion takeover bid on May 3, has nominated his own board of directors slate for the Aug. 1 shareholder meeting.
Yahoo's board, which has been in defensive mode ever since Microsoft's May 3 pullout, reiterated that it remains open to a Microsoft takeover, but its former suitor no longer wants to play ball. Last week, the Netco issued a shareholder slide show attempting to show how receptive to such offers Yahoo had been throughout the entire courtship process, and how much superior its Google partnership is to Microsoft's proposed search deal.
"Now Mr. Ballmer and Mr. Icahn have teamed up in an apparent effort to force Yahoo into selling to Microsoft its search business at a price to be determined in future 'negotiation' between Mr. Icahn's directors and Microsoft's management," Yahoo countered in a statement of its own. "We feel very strongly that this would not lead to an outcome in the best interests of Yahoo's stockholders."
Icahn and Microsoft both cautioned that there could be no assurances of a future deal between Microsoft and Yahoo should the current board be ousted. Both shied away from disclosing potential terms of any such transaction as premature.
Wall Street responded favorably to the possibility. Yahoo shares finished the day's trading up 12% at $23.91, and Microsoft shares edged up slightly to $26.03.
