The back and forth very public negoiations and posturing between Yahoo and Microsoft continued today with Jerry Yang, chief executive of Yahoo, and Chairman Roy Bostock senting a letter Monday to Microsoft CEO Steve Ballmer, reiterating that the current offer is “not in the best interests of shareholders” of Yahoo.
“We are open to all alternatives that maximize stockholder value,” Yang and Bostock said in the letter. “To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing.”
In the letter, Yang and Bostock assert that Microsoft has mischaracterized the companies’ discussions, and say the company’s threat to begin a hostile takeover is “counterproductive.”
Responded to Microsoft’s dig about its falling stock price with its own critique, Yahoo argues that the software giant’s share price fall makes its takeover bid even less attractive than when the search firm initially rejected it.
Following a letter over the weekend threatening a proxy fight and a reduced offer, Yahoo noted that Microsoft’s stock has dropped in value too.
“As a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal,” they said in a letter to Microsoft CEO Steve Ballmer.
Terms of the Microsoft bid call for each Yahoo share to be swapped for either $31 in cash or 0.9509 Microsoft shares, which using Friday’s prices values the stock element at $27.72.
Microsoft on Saturday said their premium to Yahoo’s stock price before Jan. 31 was even “more significant” in light of declining market share for search and page view and deteriorating economic conditions.
But Yahoo on Monday said its business forecast is consistent with what it outlined during its last earnings call. Yahoo said its three year strategic plan demonstrates “upside not previously communicated to the financial markets.”
“This plan has received positive feedback from our stockholders, further strengthening the view that Yahoo is worth well more as a standalone company than the value offered in your proposal, and would be even more valuable to Microsoft,” they said.
Yahoo called Microsoft’s threat to nominate board members “inconsistent with your stated objective of a friendly transaction.”
But the executives said they still remained opened to alternatives, including getting bought out by Microsoft.
“We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing,” Yang and Bostock said.
The statement comes after Microsoft warned Saturday that if a deal isn’t reached by April 26 the software company will launch a hostile takeover at a less attractive price.
Yahoo is down $.46 in early trading.
Microsoft is up $.11
