Microsoft said on Monday that it might renew talks to buy Yahoo's search technology or the entire company only after the Yahoo board and its Chief Executive Jerry Yang were ousted.
Microsoft said in a statement that a buyout of Yahoo would depend on whether billionaire financier Carl Icahn succeeds in ousting the Yahoo board and Yang.
The statement also cautioned: "We respect the right of Yahoo's shareholders to determine the destiny of their company, and we do not intend to engage in ongoing commentary on these issues in advance of Yahoo's shareholder meeting."
Icahn, a major shareholder of Yahoo, is attempting to gain support for his board slate ahead of a Yahoo shareholder vote Aug.1. He has the backing of some shareholders, including T. Boone Pickens, chairman of BP Capital LLC, and hedge-fund manager John Paulson.
Icahn has nominated nine directors to replace Yahoo's board members, including himself, Dallas Mavericks basketball team owner Mark Cuban and former Viacom Chief Executive Frank Biondi Jr.
In response to Microsoft's statement, Yahoo accused the software giant of teaming up with Icahn to force Yahoo to sell in a transaction that would not be in the best interests of Yahoo shareholders. Yahoo said it approached Microsoft Chief Executive Steve Ballmer in June about a deal but was rebuffed.
If Microsoft really wants to buy Yahoo, "we again invite them to make a proposal immediately. And if Mr. Icahn has an actual plan for Yahoo beyond hoping that Microsoft might actually consummate a deal which they have repeatedly walked away from, we would be very interested in hearing it," Yahoo said in a statement.
Icahn also issued a statement, saying that over the last week he had spoken "frequently" with Ballmer, with several conversations lasting as long as an hour and some including top executives, including Kevin Johnson, who heads Microsoft's platform and services unit.
The talks centered on the industry but also on how Microsoft and Yahoo could "do a transaction together," Icahn said.
Ballmer made it clear that he could not reach an agreement with Yahoo's current board, but would be willing to consummate a major transaction should the board be ousted, Icahn said.
Yahoo shares jumped 12 percent to 23.95 dollars this morning on word that Microsoft had been in talks over the last week with Icahn, who controls about 69 million Yahoo shares. Analysts said the development puts more pressure on Yang and increases the odds of a Microsoft deal.
Microsoft walked away from a 47.5-billion-dollar takeover bid for Yahoo in May when Yang demanded a higher price. Microsoft then tried to buy Yahoo's search business but could not reach agreement with Yahoo's board.
In order to better compete with Internet search giant Google, Microsoft wants to buy out Yahoo, particularly its search technology. Yahoo opposes selling its search business, opting instead last month for a partnership with Google, which faces antitrust hurdles. That deal could add as much as 800 million dollars in revenue a year.
Source:Xinhua
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