Yahoo rejected another offer for acquisition of its search business. This time it was a joint proposal from Microsoft Corporation and investor Carl Icahn to acquire Yahoo’s search business in return for cash, a partial stock buyout and revenue guarantees. There was also an addition requirement for the complete replacement of the Yahoo board and executive management team. Yahoo was urged to respond within 24 hours and it was made clear that negotiations were not acceptable.
Yahoo rejected the offer, saying that the proposal wasn’t “in the best interest of its stockholders” and that the recently signed search deal with Google had “superior financial value and less complexity and risk than the Microsoft/Icahn proposal.” The Yahoo! Board also believed that the immediate replacement of the current Board and removal of the top management team “would destabilize Yahoo! for the up to the one year”.
Speaking to reporters in Idaho, Google CEO Eric Schmidt confirms that he hasn’t changed his position on Microsoft’s bid for Yahoo and believes that an Independent Yahoo is better for the industry. “There's more competition ... in search, and more competition in the other advertising markets where Yahoo is a leader.", claims Eric Schmidt.
What is interesting now is that Yahoo would prefer to sell the entire company to Microsoft for $ 33 per share, an offer that Yahoo rejected as too low in May, stating that a “transaction to acquire the whole company would be much more straightforward and involve far less risk than the new proposal or any similar alternative.”