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Microsoft’s Back

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Microsoft issued a short, murky statement this afternoon saying it has suggested a limited alignment with Yahoo. It does not explain its proposal.

Perhaps it’s thinking along the lines of the deal Yahoo is supposed to be negotiating with Google, perhaps a partial acquisition (perhaps Yahoo’s Panama platform).

Microsoft also said in its statement that it could reopen talks to acquire the whole of the company depending...depending apparently on Yahoo being open to a friendly takeover.

The news follows corporate raider Carl Icahn's threat last Thursday to unseat Yahoo's board to force Yahoo to sell out to Microsoft – supposedly without knowing whether Microsoft was still interested or had in fact – as Microsoft maintained – “moved on” – “moved on” to where was unclear since it seemed to have few options – even if Yahoo wasn’t anywhere near optimal.

Icahn last week made it clear he would prefer the companies simply return to the parley table.

In this afternoon’s statement, Microsoft makes an oblique reference to Icahn and the party of dissident Yahoo shareholders backing him. It appears to be responding to Icahn’s opening, adding to the pressure mounting on Yahoo.

A few hours later, in a “we-got-your -letter” kind of response, Yahoo, which flubbed a $33-a-share acquisition offer from Microsoft – opening itself up to all sorts of fiduciary liabilities – said it was considering Microsoft’s proposal along with a “number of value maximizing strategic alternatives.”
When last heard from last Thursday Yahoo was still angling for more money. It wants at least $37.

This is what the Microsoft statement said:

“In light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo! Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business. Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo! Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties.

“There of course can be no assurance that any transaction will result from these discussions.”

And this is what Yahoo said:

“Yahoo! has confirmed with Microsoft that it is not interested in pursuing an acquisition of all of Yahoo! at this time. Yahoo! and its Board of Directors continue to consider a number of value maximizing strategic alternatives for Yahoo!, and we remain open to pursuing any transaction which is in the best interest of our stockholders. Yahoo!'s Board of Directors will evaluate each of our alternatives, including any Microsoft proposal, consistent with its fiduciary duties, with a focus on maximizing stockholder value.”

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