Just as we were all getting bored of the stand-off between Microsoft and Yahoo, things really start to, um, hot up.
Photo by Hryckowian on Flickr. Some rights reserved.
First, big Steve in the blue corner writes that decidedly hardball message to Yahoo this weekend, saying that Microsoft won't increase its offer and that if Yahoo doesn't accept within three weeks, he will move for a proxy battle for Yahoo's board.
"While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement... we've seen no indication that you have authorised Yahoo! management to negotiate with Microsoft."
"We believe now is the time for our respective companies to authorise teams to sit down and negotiate a definitive agreement... 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."
And we've just had Yahoo's response to that. A joint letter from chief executive Jerry Yang and chairman Roy Bostock accuses Microsoft of misrepresenting the negotiations between the two companies:
"We have had constructive conversations together regarding a variety of topics, including integration and regulatory issues. Your comment that we have refused to enter into negotiations to conclude an agreement are particularly curious given we have already rejected your initial proposal, nominally $31 per share at the time, for substantially undervaluing Yahoo! and your suggestions in your letter and the media that you are considering lowering the value of your proposal.
"Moreover, Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit."
A hostile takeover can't be in the interested of either company. It will make the already daunting challenge of integrating two very different companies even harder and, as Kara BoomTown Swisher notes, takes the focus off the real enemy - Google.
Yahoo says the threat to takeover through a proxy battle is counterproductive and gives as good as it gets:
"In conclusion, please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximize stockholder value. 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 and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing.
"Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value."
Despite the posturing, Yahoo has snuck in to this letter that it is not opposed to a Microsoft takeover - it just has to be at the right price.
