| By Search News Desk |
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| April 6, 2008 04:00 AM EDT |
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"It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!'s shareholders and employees," thundered Microsoft's Steve Ballmer yesterday in a letter to the Board of Directors of Yahoo! after a two-month lull in which Yahoo! has done nothing whatsoever to encourage Microsoft's $44.6BN uninvited takeover bid for it...and quite a bit to frustrate it.
Ballmer's letter underlines that in this 2-month interim "we've seen no indication that you have authorized Yahoo! management to negotiate with Microsoft" and continues:
"During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!'s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly."
Then comes the point of the weekend letter: an ultimatum.
"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."
Ballmer lays it on the line that a proxy fight means that all bets are off in respect of the $31 a share bid, saying:
"The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal."
As reported here on SYS-CON.com yesterday, Microsoft has realized that, with the Fed Chairman saying the U.S. may be in a recession after losses tied to the collapse of the subprime mortgage market, it would hardly be surprising if it didn't revisit the offer terms and begin to wonder whether $31 a share is too much.
The $44.6BN question now then is: will Ballmer's ultimatum force Yahoo! CEO Jerry Yang (pictured) finally to start substantive discussions to avoid a proxy fight with the world's biggest software maker?
The Web's leading content creators, advertisers, and consumers will all watch the next steps with bated breath...
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