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Microsoft deadline for Yahoo acquisition offer passes

A Microsoft deadline for Internet service company Yahoo to accept its US$44.6 billion acquisition offer expired at midnight on Saturday, setting the stage for a hostile takeover bid by the software giant.

The expiration of the deadline — without comment from either side — was likely to pave the way for an ugly proxy battle — a fight by Microsoft for a vote by Yahoo shareholders to place pro-Microsoft officials on its board of directors.

In an open letter to the Yahoo board of directors on April 5, Microsoft chief executive Steve Ballmer gave the Internet pioneer three weeks to accept the US$31-a-share takeover offer or face a proxy fight.

Ballmer also warned that any further delays could result in a less attractive offer for Yahoo.

But Yahoo’s board of directors has said the offer “substantially undervalues” the firm, insisting the company is worth at least US$40 a share.

Microsoft is eager to merge the two companies’ resources to take on Google, which dominates the lucrative Internet search advertising market.

Founded by Jerry Yang (楊致遠) and David Filo in 1994, Yahoo is a distant second in that market to Google, which would still hold an impressive lead over a combined Microsoft-Yahoo entity.

Microsoft chief financial officer Chris Liddell said on Thursday that the US software giant is standing by the Saturday deadline.

“With respect to Yahoo we have been clear: speed is of the essence,” Liddell said.

“The idea we should increase our bid just because we can afford to is not one that I favor. Unless we make progress with the Yahoo board by this weekend, we will explore our alternatives,” he said.

Liddell’s comments echo those made by Ballmer earlier in the week.

“We have a strategy for the Internet that we are very excited about,” Ballmer said. “We think we can accelerate our strategy by buying Yahoo and we will pay what makes sense for us to pay for our shareholders.”
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