Saturday, April 5, 2008

Microsoft gives Yahoo! an ultimatum

As much as I like The Shield and Dirt, I am enjoying this drama...

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Microsoft has given...three weeks to accept its buyout bid before it launches a proxy fight and possibly lowers its offer price.

"If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board..."

On Feb. 1, Microsoft proposed to acquire Yahoo! for $44 billion in cash and stock. The deal represented a 62% premium to Yahoo!'s stock price. Since then...Microsoft shares have dipped and the deal is now valued at $42 billion. In his letter, Ballmer said..."The substantial premium reflected in our initial proposal anticipated a friendly transaction with you...If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective, which will be reflected in the terms of our proposal."

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