By Michael Todd
Microsoft today announced that it has withdrawn its proposal to acquire Yahoo. “We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole. Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees,” said Steve Ballmer, chief executive officer of Microsoft.
In response Roy Bostock, Chairman of Yahoo! issued the following statement: “We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets. From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft’s offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view. Yahoo! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making”
Jerry Yang, co-founder and chief executive officer, Yahoo! Inc. added, “I am incredibly proud of the way our team has come together over the last three months. This process has underscored our unique and valuable strategic position. With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users.”
Microsoft made an unsolicited proposal on February 1st, to acquire the outstanding shares of Yahoo common stock for 31 dollars per share consideration. It represents a total equity value of around 44.6 billion dollars, 62 percent premium over the closing price of Yahoo common stock on January 31, which was the last day of trading before Microsoft announced its offer. However, Yahoo’s board clearly said that it would not consider any offer lower than 40 dollars per share, which it considered to be a fair price.
At the beginning of the month, the game was spiced up a bit, as Yahoo Inc was given three weeks to accept Microsoft Corp's $31-a-share cash-and-stock offer.
