Microsoft not prepared to give up in fight for Yahoo!

12 Feb 2008

In what is shaping up to be a battle royale for the hearts, eyeballs and wallets of internet consumers, Microsoft has reiterated its intention to acquire web portal Yahoo! despite the company’s rejection of its US$44.6bn bid yesterday.

The company pointed out that its offer of US$31 a share represented a total equity value of almost US$45bn and is 62pc above the closing price of Yahoo!’s stock on 31 January.

Yesterday Yahoo!’s board stated that Microsoft’s offer substantially undervalues the company.

In a statement last night, Microsoft stated it is prepared to use all available steps to pursue its takeover of Yahoo!, which it said reflected the desires of stakeholders in the company.

“It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies,” Microsoft said.

“Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.”

Microsoft said it is offering shareholders superior value and the opportunity to participate in the upside of the combined company.

“The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while better positioning the company to compete in the online services market.

“A Microsoft-Yahoo! combination will create a more effective company that would provide greater value and service to our customers. Furthermore, the combination will create a more competitive marketplace by establishing a compelling No 2 competitor for internet search and online advertising.

“The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realise the value inherent in our proposal,” Microsoft commented.

By John Kennedy