Steve Ballmer to Yahoo Board: Three Weeks and Then Things Get Nasty

On a Friday Microsoft (MSFT) made public their offer to buy Yahoo (YHOO) at $31 a share. Yesterday, another Friday, but two months later and with little progress made, reports circulated that Microsoft might be reconsidering its position. Saturday, any confusion on that point was removed.

In a letter to Yahoo Board of Directors (copied below), Steve Ballmer explicitly began the countdown: three weeks. Three weeks and then things get nasty.

The ultimatum issued via the letter demands negotiations be completed and terms reached. If they’re not, Microsoft will take the offer, likely at a lower price, straight to the shareholders in a tender offer and proxy fight.

“During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular,” wrote Ballmer. “By any fair measure, the large premium we offered in January is even more significant today.”

Alternatives to the deal have not materialized and Yahoo is running out of options. Now, the clock is ticking.

Initially Microsoft’s offer was worth $44.6 billion ($31 a share). Currently, with stock prices down, it’s worth about $42b.

So far, Yahoo’s spokespeople have not issued any statements.

Comments

[WAKEUP:]

NOTE TO STEVE BALLMER: If you're so sure you've got Yahoo! outgunned, WHY WAIT THREE WEEKS? Stroll on down to the OK Corral, and start the shootout, NOW. What's holding you back, Stevie? Palms a little sweaty, on the pistol grips . . .?

2008 Apr 06 12:55 PM

[Seth:]

For those looking for the full text of Ballmer's letter, it can be found here via Metue or is alternatively available here on Microsoft's press pages

2008 Apr 06 02:16 PM

[Seth:]

Microsoft Link: www.microsoft.com/pres...

2008 Apr 06 02:17 PM