Ballmer Wants Board Change at Yahoo
Microsoft's executives have been talking with investor and corporate raider Carl Icahn about renewed plans for Microsoft to acquire part or all of Yahoo, provided that Yahoo's board is replaced. The details were described in an open letter issued Monday by Icahn, which is addressed to Yahoo's shareholders.
Icahn disclosed in his letter that he's spoken with Microsoft's CEO Steve Ballmer about the bid, originally pegged at $44.6 billion for the whole company when it was first disclosed by Microsoft in January. Microsoft today issued a statement confirming some of the details in Icahn's letter. In particular, Ballmer claims he can't work with the current Yahoo management and board.
"We have concluded that we cannot reach an agreement with them [Yahoo's management and current board]," Microsoft's statement says. "We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the 'Search' function with large financial guarantees or, in the alternative, purchasing the whole company."
The statement indicates that Microsoft is prepared to negotiate "immediately" after a new Yahoo board is selected, but no price details were given.
The required nine months time for regulatory clearance of the Yahoo deal would involve financial risk to Microsoft, according to Icahn's letter, quoting Ballmer. Yahoo might mismanage the company in that period when Microsoft has capital at stake, the letter alleges.
Yahoo's management released its own statement in response to Icahn's letter, noting that Ballmer backed away from the acquisition deal "as recently as June" at the discussed price range.
"If Microsoft and Mr. Ballmer really want to purchase Yahoo!, we again invite them to make a proposal immediately," Yahoo's statement said.
Microsoft's unsolicited bid for Yahoo officially started on Jan. 31, but the talks stalled on price in the stock plus cash deal. Microsoft initially offered its stock at $33 per share, but Yahoo's management reportedly counter-proposed a $37 per share price.
Icahn, a Yahoo investor, has been openly campaigning to push Yahoo's sale to Microsoft. He currently is promoting his own slate of candidates to replace Yahoo board members with the aim of facilitating a sale to Microsoft.
Yahoo's stock has declined by 27 percent since mid-May when Microsoft called off the initial deal. By early this afternoon, Yahoo's stock was trading at $23.85, up over the previous day by 2.5 percent.