Roy Bostock, chairman of Yahoo!, has wasted no time in responding to Carl Icahn's attempt to seize control of the company's board.
In an open letter Bostock disputes Icahn's claim that Yahoo!'s board has ignored its duties to maximise shareholder value. He also reminds Icahn that Microsoft has publicly said it has "moved on".
The letter says: "May I remind you that there is currently no acquisition offer on the table from that company [Microsoft] or any other party."
Bostock said directors considered the proposal carefully. After the first offer of $31 a share, directors met to discuss this and other offers 20 times. Directors also met with large shareholders to get their views. There were also numerous contacts with Microsoft including seven face to face meetings.
The upshot of all this activity was that Yahoo! made clear it did not believe the offer was high enough.
On 2 May Microsoft made an oral offer of $33 a share. The board told Yahoo!'s chief executive Jerry Yang to tell Microsoft they would be prepared to do a deal at $37 a share.
The letter said:
This was communicated to Microsoft in-person at a meeting in Seattle on May 3rd. With Microsoft's offer at $33 and Yahoo!'s counter-proposal at $37, Microsoft elected, within hours, to walk away from the negotiating table and informed us that they were "moving on," having never engaged further on price or any of the key non-price deal terms.
In short, Yahoo!'s board was at every point in this process prepared to enter into a transaction with Microsoft that would maximize stockholder value--and included certainty of value and closing. What Yahoo!'s independent board refused to do was to allow control of this company to be acquired for less than its full value.
Bostock said that Yahoo!'s business continues to perform well and the board continues to look at other ways to maximise shareholder value, but none of these would necessarily preclude a deal with Microsoft.
In other news, Yahoo! announced a multi-year deal with ad agency WPP allowing all their different agencies to buy internet display advertising. WPP's 24/7 Media will create a trading platform which connects to Yahoo!'s Right Media Exchange. The two companies will also work to make a WPP marketplace using inventory from Yahoo! and from 24/7's Global Web Alliance. This will also be open to other publishers. ®