July 14, 2008 -- (WEB HOST INDUSTRY REVIEW) -- Yahoo! (yahoo.com) has rejected another bid from Microsoft and billionaire investor Carl Icahn on Saturday after the two issued a joint offer late Friday, according to a report on The Register (theregister.com).
Icahn has long been petitioning for the replacement of company CEO Jerry Yang, as well as the company's board of directors. The joint bid proposed that Microsoft would takeover Yahoo!'s search business, while Icahn and his new team operate the rest of the business.
"Carl Icahn and Microsoft presented us with a 'take it or leave it' proposal under which we would be required to restructure the company, hand over to Microsoft Yahoo!'s valuable search business and to Carl Icahn the rest of the company, giving us less than 24 hours to respond. It is ludicrous to think that our Board could accept such a proposal," said Roy Bostock, Yahoo! chairman.
The search engine previously rejected a $33 a share offer from Microsoft in May, and Yahoo! CEO Jerry Yang said at the time of the offer that the bid "undervalues" the company.
Yang and company have since then changed their mind, and now says it is prepared to sell the whole company to Microsoft for $33 a share. However, Yahoo! said it does not want to divide the company, and that its existing search deal with Google offers a better value as it would lead to a full sale of the company.
Yahoo! is also against the idea that Icahn and his directors would be operating the non-search engine portion of the company, claiming that they have little knowledge of running an Internet service.
The company also argues that the immediate removal of all directors would cause it to lose direction for at least a year until the takeover earned regulatory approval.
Icahn sent an angry letter Monday to Yahoo! shareholders, which warns shareholders, "DON'T BE FOOLED" and "ARE YOU, THE REAL OWNERS OF YAHOO!, WILLING TO TAKE THE SAME RISK?". He asks shareholders to support his petition and vote for his slate of directors at the upcoming shareholders meeting on August 1.
Yahoo! has issued a response to Icahn's letter, condemning Icahn's bid as well as asking shareholders to support its existing board of directors.
The two companies will now discuss further action at Yahoo!'s shareholders meeting. Last week the search engine provided shareholders with materials for proxy voting for those members that will not be present.
