YAHOO! Inc, owner of the second-most popular search engine, has rejected a restructuring proposal by Microsoft Corp and billionaire investor Carl Icahn that would have included the sale of Yahoo's search business to Microsoft.
Yahoo's advertising agreement with Google Inc offers "superior financial value" to the proposal from Microsoft and Icahn, the California-based company said in a Business Wire statement yesterday, according to Bloomberg News.
Icahn has criticized Yahoo Chief Executive Officer Jerry Yang for failing to close a deal with Microsoft, the world's biggest software maker. Microsoft, which on May 3 withdrew an offer to buy Yahoo, said last Monday it may renew talks for a deal if Icahn, who controls about 69 million Yahoo shares, succeeds in ousting Yang and his board.
"Carl Icahn and Microsoft presented us with a 'take it or leave it' proposal," Chairman Roy Bostock said in the statement. "It is ludicrous to think that our board could accept such a proposal. We will not be bludgeoned into a transaction that is not in the best interests of our stockholders."
An outright acquisition of Yahoo would be much more "straightforward," according to Yahoo's statement. The company's board "believes a whole company transaction could be negotiated and executed" before August 1, it said.
'Odd' alliance
Yahoo shares closed at US$23.57 last Friday in Nasdaq Stock Market trading. The shares have climbed 1.3 percent this year. Microsoft, which fell 20 cents to US$25.25 on Friday, has slipped 29 percent this year.
Yahoo said the proposal from Microsoft and Icahn was made on Friday evening and the company was given less than 24 hours to accept. Bostock called the alliance between Microsoft and the billionaire activist "odd and opportunistic."
His comment followed an interview in the Wall Street Journal last week in which CEO Yang accused Microsoft of wanting to disrupt the Web search company. He also told the newspaper that for Yahoo shareholders to trust Icahn would be "a bad choice."
Yahoo reported eight quarters of profit declines before Microsoft's bid.