The thumb wrestling and public positioning continues. As expected, Yahoo (YHOO) Monday issued a prompt and dismissive (but diplomatic) reply to Steve Ballmer’s weekend ultimatum. Yahoo “is not opposed to a transaction with Microsoft (MSFT) if it is in the best interests of our stockholders,” Jerry Yang and Roy Bostock said. The offer, however, remains too low. Further, they charge that Microsoft’s assertions and threats are misrepresentative and non productive.
Some of the highlights of the 865 word letter along with interpretive commentary:
•Our Board … unanimously concluded that [the offer] was not in the best interests of Yahoo! and our stockholders, and rejected it publicly on February 11, 2008. …At the same time, we have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft.
INTERPRETATION: “Raise Your Offer.”
• Our Board’s view of your proposal has not changed. We continue to believe that your proposal is not in the best interests of Yahoo! and our stockholders. … Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal. … In contrast to your assertions about the effect of general economic conditions on our business, Yahoo!’s business forecasts are consistent with what we outlined in our last earnings call.
INTERPRETATION: “The economy may not be in great shape but Yahoo is doing fine. Raise Your Offer.”
•We regret to say that your letter mischaracterizes the nature of our discussions with you. We have had constructive conversations together regarding a variety of topics … Your comment that we have refused to enter into negotiations to conclude an agreement are particularly curious given we have already rejected your initial proposal … Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit.
INTERPRETATION: “We won’t make a counter offer. If you want to proceed: Raise Your Offer!…Got it Steve? We want YOU to raise your offer.”
