The Microsft-Yahoo battle continued Monday with some unexpected twists. Microsoft indicated it will keep fighting even as Yahoo’s board raised the price and reports suggested Yahoo is trying to restart merger talks with AOL.
The saga that began with Microsoft’s bid of $44.6 billion for Yahoo brought objections from Google and led Yahoo’s board to unanimously reject the offer Monday. The board, with support from its financial and legal advisers, including Goldman Sachs, Lehman Brothers and Moelis & Company, said the offer wasn’t in the best interests of the company or its stockholders.
Microsoft Calls Decision Unfortunate
In response, Microsoft said it won’t accept that decision. In a published statement, the company called Yahoo’s decision not to embrace Microsoft’s “full and fair proposal” unfortunate.
“We are offering shareholders superior value and the opportunity to participate in the upside of the combined company,” Microsoft said. “The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.”
A Microsoft-Yahoo combination, the company insisted, would create a more effective company that would provide greater value and service to customers. Furthermore, Microsoft said, the combination would create a more competitive marketplace by establishing a compelling number-two competitor [behind Google] for Internet searches and online advertising.
“The Yahoo response does not change our belief in the strategic and financial merits of our proposal,” Microsoft said. “As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo’s shareholders are provided with the opportunity to realize the value inherent in our proposal.”
The AOL Twist
The AOL rumors added yet another twist to the saga. The Times of London reported that Yahoo and AOL tried to come to an agreement in the past but could not agree on a price. Google has a…