Steve Ballmer on Saturday, according to Reuters – has sent a letter to the Yahoo Board of Directors setting a three-week deadline or better, giving an ultimatum to move forward with his more than $40 billion buyout offer.
Ballmer, in his letter stresses the point that “Microsoft will proceed by taking its case directly to Yahoo shareholders and work to elect a new slate of directors, if the board doesn’t respond by the deadline by April 26″.
He continues arguing that the economy and the market for Internet stocks have deteriorated in the intervening period, and that Yahoo’s share of Web search and advertising business has declined, referring to industry market reports.
Furthermore, Ballmer threatens to reduce Microsoft’s offer if Yahoo fails to meet the deadline, emphasizing the argument that actions will have an undesirable impact on the value of Yahoo from M’soft’s perspective which will be reflected in the terms of his proposal.
Yahoo’s board formally rejected Microsoft Corp.’s bid, made in January and announced Feb. 1 saying it undervalues the company.
The Silicon Valley company has since explored alliances with Google Inc., News Corp.’s MySpace.com and Time Warner Inc.’s AOL, but no alternative to Microsoft’s offer has surfaced.
Ballmer acknowledged these alternative negotiations in the letter and questioned why the company is not negotiating with Microsoft.
“This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares,” Ballmer wrote in the letter.
Yahoo (YHOO) shares closed on Friday at $28.36 each while Microsoft (MSFT) ended the week at $29.16. Both trade on Nasdaq.
Based on Friday’s closing price, the premium to Yahoo’s stock is around 45 percent, while the current total value of Microsoft’s offer is $42.2 billion in cash and stock.
According to sources – Yahoo’s board is reviewing the letter.
