Yahoo has rejected a joint proposal from Microsoft and investor Carl Icahn to acquire Yahoo’s search business and to restructure the company.
Microsoft and Icahn, who has launched a proxy fight against Yahoo, made the proposal on July 11. Yahoo released a statement rejecting the offer the following day and declined to speak beyond its issued company statements.
Yahoo cited a number of reasons why its board rejected the proposal, including the fact that it would require the “immediate replacement” of the company’s existing board as well as removal of its top management team.
“This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo’s stockholders in mind,” said Roy Bostock, chairman of the board at Yahoo, in a statement.
In a letter to shareholders dated July 14, Icahn said that he had spent “hours and hours” trying to get Microsoft and Yahoo together because he believed that a partnership would benefit Yahoo shareholders. In addition, Icahn said that he and Microsoft had been willing to “discuss keeping a number of the current board members and Jerry Yang as Chief Yahoo.”
In the letter, Icahn accused Yahoo of behavior that “distort[s], omit[s] and twist[s] events and facts,” related to last week’s negotiations. His letter raised a number of discrepancies in Yahoo company statements regarding the bid.
Microsoft also released a statement on July 14 claiming that certain statements made by Yahoo in its statement contained “inaccuracies.” In particular, Microsoft’s proposal did not include changes to Yahoo’s governance, the company said.
Microsoft initially offered to purchase Yahoo for $31 a share on January 31. Unable to reach an agreement with Yahoo, Microsoft officially withdrew its proposal to acquire the company on May 3.
Microsoft referred press inquiries to its company statement. Icahn did not respond to a request for comment in time for press deadline.