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It's starting to get ugly…

Yahoo CEO Jerry Lang and Chairman Roy Bostock have issued a blunt rejection to Microsoft in a public letter, following Steve Balmer's attempts to up the pressure on its takeover target over the weekend.

"We consider your threat to commence an unsolicited offer and proxy contest to displace our independent Board members to be counterproductive and inconsistent with your stated objective of a friendly transaction," explained the duo. "We are confident that our stockholders understand that our independent Board is best positioned to objectively and knowledgeably evaluate our Company's alternatives and to maximize value… please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing."

By contrast, Balmer had boldly stated in another open letter to Yahoo board members: "If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board... The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal."

Now Microsoft is used to getting its way, but Yahoo is a substantially bigger fish than anything it has ever attempted to land before and this certainly is shaping up to be one heck of a fight. Personally, unless it can find an alternative buyer, I think Yahoo may eventually be forced to concede but we should get some highly entertaining slanging matches before then...

Links:
Lang * Bostock's Open Letter to Balmer
Balmer's Open Letter To Yahoo

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