Microsoft officially withdrew its proposal to acquire Yahoo on May 3.
In a letter to Yahoo CEO Jerry Yang, Microsoft CEO Steven A. Ballmer wrote, “By failing to reach an agreement with us, you and your stockholders have left significant value on the table.”
Microsoft initially offered to purchase Yahoo for $31 a share on January 31. The company recently increased its offer to $33 a share, but Yahoo turned it down, requesting at least $37 per share, according to Microsoft.
“I am disappointed that Yahoo has not moved towards accepting our offer,” Ballmer wrote in the letter. The $33 per share offer would have reflected a “premium of [more than] 70%” compared to the price at which Yahoo’s stock closed on January 31, he added.
Ballmer also noted in his letter that Yahoo’s “new arrangement” with Google fundamentally undermined the company’s strategy and long-term viability.
In April, Yahoo engaged in a two-week test of Google’s AdSense for search service. According to Yahoo, the test was one way the company’s board of directors was “exploring strategic alternatives to maximize shareholder value.”
When contacted by e-mail today, Tracy Schmaler, a Yahoo spokeswoman, wrote that “there is not any current arrangement” between Yahoo and Google.
In response to Microsoft’s announcement, Roy Bostock, Yahoo’s chairman, issued the following statement: “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.”
Yang added, “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.”