Microsoft and Carl Icahn fired back at Yahoo on Monday as the corporate raider continues a quest to overthrow the struggling Internet firm’s board and form an alliance with the software giant.
Microsoft and Icahn separately accused the embattled Internet pioneer of misrepresenting a Friday offer to buy Yahoo’s online search business.
Yahoo vehemently rejected what it derided as a “take it or leave it” proposal from Icahn and Microsoft, saying any notion of accepting it was “ludicrous.”
Yahoo said the offer mandated a dismantling of the company and a massive restructuring in which the firm’s board and top executives would be replaced.
“This discussion has been mischaracterized as a take it or leave it ultimatum, rather than a timetable in order to move forward to intensive negotiations,” Microsoft said in a release.
Icahn fired off a more heated response in a letter to Yahoo shareholders, saying he has never before seen a company “distort, omit and twist events and facts in the manner that Yahoo has done.”
Microsoft said that the offer stemmed from a telephone conversation with Yahoo board chairman Roy Bostock and that the deal would have guaranteed Yahoo advertising revenues generated by online search advertising.
Terms were negotiable and more time to work out a deal could have been arranged, Icahn and Microsoft said.
“It looks like Yahoo went to Microsoft and asked them to jump through hoops and then rejected the offer out of hand,” said analyst Rob Enderle of Enderle Group in Silicon Valley.
“I think [Microsoft chief executive Steve] Ballmer is pretty peeved about the way it worked out and they feel like they were played,” Enderle said.
If it is a tactic by Yahoo to portray Icahn as conspiring with Microsoft to Yahoo’s detriment, it could backfire, he said.
Bostock said the offer was crafted without input from Yahoo and weighted mightily in Microsoft’s favor.
“This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo’s stockholders in mind,” Bostock said in a Saturday statement spurning the latest offer.
The deal called for Yahoo’s board to be immediately replaced by an Icahn-led slate and the removal of top Yahoo executives, with co-founder and chief executive Jerry Yang presumably heading the list.
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