By: E&P Staff
Yahoo on Monday responded to Microsoft’s deadline for a decision on its $44.6 billion takeover bid by saying the unsolicited offer continues to undervalue Yahoo.
Over the weekend, Microsoft CEO Steve Ballmer threatened to start a proxy war with Yahoo if it does not come to an agreement on the takeover within three weeks.
“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,” Ballmer wrote in a letter posted on the company’s Web site.
Ballmer also suggested that given Yahoo’s tumbling stock price, the offer made on Jan. 31 of $31 per share is even more generous now. “By any fair measure, the large premium we offered in January is even more significant today,” Ballmer wrote Saturday. “We believe that the majority of your shareholders share this assessment.”
In a “Dear Steve” letter from Chairman Roy Bostock and CEO Jerry Yang, Yahoo responded that Microsoft’s offer continues to undervalue Yahoo, which it said it continuing to perform well financially.
“In addition, our three-year financial and strategic plan which we have made public demonstrates significant potential upside not previously communicated to the financial markets,” Yahoo wrote. “This plan has received positive feedback from our stockholders, further strengthening the view that Yahoo is worth well more as a standalone company than the value offered in your proposal, and would be even more valuable to Microsoft.”
Yahoo, which has forged a major advertising partnership with several large newspaper chains, did leave the door ajar for a possible agreement with Microsoft.
“We are open to all alternatives that maximize stockholder value,” Yahoo said. “To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis.”