Yahoo rejects Icahn-Microsoft joint proposal as 'opportunistic'

YAHOO HAS rejected an attempt by Microsoft and investor Carl Icahn to replace its board and buy its search business, condemning the joint move as an "odd and opportunistic alliance".

The internet search company said it had repeated an offer to sell all of Yahoo to Microsoft for at least $33 per share. It had also offered to negotiate an improved search-only sale, but Microsoft had rejected both offers.

Microsoft and Mr Icahn were not available for comment. Their apparent move was an unusual pre-emptive strike ahead of Yahoo's annual meeting on August 1st, where Mr Icahn is attempting to replace the Yahoo board with his own slate of directors.

Mr Icahn has made no secret of his plans, if successful, to try to sell Yahoo to Microsoft, which abandoned a $47.5 billion (€29.8 billion) bid on May 3rd. Yahoo said it received a proposal on Friday for a restructuring that would have included the acquisition of its search business by Microsoft. It said it was given less than 24 hours to accept the proposal, "the fundamental terms of which Microsoft and Mr Icahn made clear they were unwilling to negotiate".

Yahoo rejected the deal as not in the best interests of shareholders. It cited its recent agreement with Google to provide advertising as offering superior financial value and less risk. It said the Microsoft-Icahn proposal would preclude a potential sale of all of Yahoo for a full and fair price.

It also required the immediate replacement of the board and removal of the top management team, which the board believed "would destabilise Yahoo for the up-to-one year [time] it would take to gain regulatory approval for this deal".

Yahoo chairman Roy Bostock said it was ludicrous to think Yahoo could accept the "take it or leave it" proposal from Microsoft and a "single short-term investor".

"We will not be bludgeoned into a transaction that is not in the best interests of our stockholders," he said.

The Microsoft/Icahn proposal also contained illustrations of how value could be returned to shareholders. Yahoo said this included the spin-off of its Asian assets and returning the cash to shareholders. - ( Financial Times service)