Microsoft announced on Saturday that it has withdrawn its proposal to acquire Yahoo! after the two companies could not come to an agreement on a price and other terms.
At the final meeting on Saturday Yahoo said the lowest price they could accept was $37 per share. Microsoft offered $33 per share (up from the initial $31 per share offer in January). At that time Microsoft withdrew the offer.
The letter from Microsoft CEO Steve Ballmer to Yahoo! CEO Jerry Yang, Ballmer stated he was disappointed that Yahoo! would not accept their $33 per share offer up from the initial $31 per share offer from back in January:
“In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer. (…) But clearly a deal is not to be”.
Yahoo! Issues Statement in Response to Microsoft issued the following statement in response to Microsoft Corporation’s announcement that it has withdrawn its proposal to acquire Yahoo!
“We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets. From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft’s offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view. Yahoo! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making”.
Yahoo Inc Chief Executive Jerry Yang said on Monday it was Microsoft that left the negotiating table and he was still open to discussing a deal with the software maker.
“We were negotiating a way to find common ground and then on Saturday they chose to walk away,” Yang told Reuters in an interview. “They started it and they walked away.”
Now, Yahoo is under pressure to explain their refusal to sell the business for $33 per share.
Market experts speculate if Microsoft really walk away from the Yahoo deal or the weekend’s behaviour was just yet another negotiating tactic. When asked if Yahoo would still leave a door open to talks, Yahoo’s CEO Yang said: “If they have anything new to say, we would be open … I am more than willing to listen”.
