SEATTLE - Microsoft has started reverse counting for Yahoo to acknowledge its $41 billion takeover offer in a letter to the Internet pioneer’s board Saturday. They warned that if the deal wasn’t reached by April 26 the software maker would begin an unfriendly buyout at a less striking price.
“If we don’t conclude an agreement within the next three weeks, we will be forced to take that case directly to your shareholders, with the initiation of a proxy contest to choose an alternative slate of directors for the Yahoo board,” wrote Microsoft Chief Executive Steve Ballmer.
“If we are compelled to take an offer directly to your shareholders, that act will have an unwanted impact on the value of your company from our standpoint which will be mirrored in the conditions of our proposal,” he stated.
A Yahoo spokeswoman refused to comment Saturday. In the letter, Ballmer stated that Yahoo’s search share and page views, two measures of the strength of the Web portal company’s business, emerge to have fallen since the offer was made at the end of January. Judging by Friday’s closing share prices, the deal is now value just under $41 billion.
Yahoo’s board formally discarded Microsoft Corp.’s offer in February, stating it put too small a price on the company. Since then, the Silicon Valley Company has searched coalitions with Google Inc., News Corp.’s MySpace.com and Time Warner Inc.’s AOL, but no other possibility to Microsoft’s offer has surfaced.
Ballmer acknowledged the alternative talks and asked why, in the absence of another offer, Yahoo was still unwilling. Ballmer said “The Microsoft’s offer has grown stronger as the economic climate has weakened.”
“We believe that the majority of your shareholders share this appraisal,” in spite of a prediction recently released by Yahoo that suggests the company’s profits to rise more than 70 percent during the next three years, he wrote.
Microsoft has said from the very beginning that it would mull over all possible ways of getting the deal done, including taking its offer directly to Yahoo’s shareholders, as well as working to choose its own candidates to fill Yahoo’s board at the company’s annual shareholder meeting, and thus the deadline for Microsoft to nominate its slate.
Yahoo has not yet set a new date for the meeting.
Before Saturday, it was identified that Microsoft had hired a proxy solicitation firm to help with an unfriendly bid, but the software maker had made no assertion as to when that might happen.
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