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On Saturday, May 3, Microsoft Corp. said it would end its quest to acquire Yahoo! Inc.
In a letter to Yahoo! CEO Jerry Yang, Microsoft's CEO Steven A. Ballmer said,"Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer.
"After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal," Yahoo Chairman Roy Bostock quickly responded Saturday night in a press release. "We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets," Bostock wrote. "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." Yang 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 announced Friday, Feb. 1, it had offered to buy Yahoo! for $44.6 billion in cash and stock to form an operating system and search engine giant that could compete with Google Inc. Yahoo! rejected that bid on February 11 and went seeking other suitors. At one time in February, there was speculation News Corp. might spin out its Web properties and hitch them to Yahoo! in exchange for a minority stake. Yahoo also stayed busy on the dealmaking front, buying venture capital-backed Maven Networks Inc. for about $160 million on February 12. On April 9, Yahoo! paid an undisclosed sum for IndexTools, which makes Web analytics software for online marketing. Throughout the past three months, Yahoo! has remained defiant against the proposed merger. The original deadline Microsoft Corp. set for Yahoo! Inc. to come to terms on an acquisition passed last weekend without any activity. However, on Friday, many major news outlets speculated that a deal could be reached this weekend if Microsoft raised its bid.
Instead Ballmer sent his company's withdrawal. "We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners," said Ballmer. "I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table."
"But clearly a deal is not to be." - by Thomas Groppe Read Yahoo! response press release Categories Deal Video
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