Yahoo Rejects Microsoft, Icahn Bid to Split Company (Update1)
July 13 (Bloomberg) — Yahoo! Inc. rejected a proposal from Microsoft Corp. and billionaire investor Carl Icahn that would have broken up the Internet company, saying they were trying to “coerce” officials into selling assets.
Under the plan, Yahoo’s current board and top management would be replaced. Microsoft would buy Yahoo’s search business and leave Icahn with the rest of the Sunnyvale, California-based company, an “odd and opportunistic alliance” that doesn’t have the best interests of shareholders in mind, Yahoo said.
“Carl Icahn and Microsoft presented us with a `take it or leave it’ proposal,” Chairman Roy Bostock said in a statement. “It is ludicrous to think that our board could accept such a proposal. We will not be bludgeoned into a transaction that is not in the best interests of our stockholders.”
The decision steps up pressure on Yahoo Chief Executive Officer Jerry Yang to prove his alternative deal, a partnership with Google Inc., can deliver better returns. Icahn has proposed a set of directors and is challenging Yang for control of the board at an Aug. 1 meeting.
Yahoo, owner of the No. 2 Web search engine after Google, said it was given 24 hours to weigh the latest proposal, made Friday evening. Some of the ideas, including spinning off the Asian investment assets and returning cash to shareholders, are items the board is already considering.
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