Yahoo board rejects “take it or leave it” proposal from Microsoft/Icahn alliance
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Yahoo! Inc. today announced that it has rejected a joint proposal from Microsoft Corporation and Carl Icahn for a complex restructuring of Yahoo! that would include the acquisition of Yahoo!’s search business by Microsoft. The new proposal required Yahoo to restructure the company, hand over to Microsoft, Yahoo!’s valuable search business and to Carl Icahn the rest of the Company.
The proposal was made on Friday evening and Yahoo! was given less than 24 hours to accept the proposal. Microsoft and Mr. Icahn were unwilling to negotiate the terms of this proposal as per the press release. Yahoo!’s Board of Directors subsequently rejected the proposal deeming it as not in the best interests of its stockholders.
The Board’s rejection of the proposal was based on a number of factors, including the following:
1. Yahoo!’s existing business plus its recently signed commercial agreement with Google has superior financial value and less complexity and risk than the Microsoft/Icahn proposal.
2. The Microsoft/Icahn proposal would preclude a potential sale of all of Yahoo! for a full and fair price, including a control premium.
3. The major component of the overall value per share asserted by Microsoft/Icahn would be in Yahoo!’s remaining non-search businesses which would be overseen by Mr. Icahn’s slate of directors, which has virtually no working knowledge of Yahoo!’s businesses.
4. The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo!. The Yahoo! Board believes these moves would destabilize Yahoo! for the up to the one year it would take to gain regulatory approval for this deal.
The complete press release from Yahoo can be read here.
SOURCE: Yahoo
