Microsoft, Yahoo discussing an “alternative” deal
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Carl Icahn got his wish: Microsoft and Yahoo are back at the negotiating table.
On Thursday the billionaire investor launched a proxy fight to take control of Yahoo and pilloried its directors for not accepting Microsoft’s takeover offer. Today the Redmond, Wash.-based software giant said it was talking with Yahoo about a strategic partnership.
So far, Microsoft said, the talks have centered on an arrangement that falls short of a full acquisition. Microsoft didn’t say what kind of deal the companies were discussing. In the past, Microsoft execs has floated the idea of spinning of their struggling MSN division into a joint venture with Yahoo. Another possibility: Microsoft could sell MSN to Yahoo in exchange for a stake in the company. Yahoo has discussed a similar deal with Time Warner about its AOL division.
Word of the renewed talks comes two weeks after Microsoft yanked its $47.5-billion takeover offer for Yahoo. Yahoo had rejected Microsoft’s offers and said it would explore strategic alternatives to revive its financial growth trajectory. But investors have held out hope that Microsoft would ultimately buy the Sunnyvale, Calif., company. Here’s Microsoft’s full statement:
In light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo! Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business. Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo! Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties.
Updated with Yahoo’s response:
‘Yahoo! has confirmed with Microsoft that it is not interested in pursuing an acquisition of all of Yahoo! at this time. Yahoo! and its Board of Directors continue to consider a number of value maximizing strategic alternatives for Yahoo!, and we remain open to pursuing any transaction which is in the best interest of our stockholders. Yahoo!’s Board of Directors will evaluate each of our alternatives, including any Microsoft proposal, consistent with its fiduciary duties, with a focus on maximizing stockholder value.’
-- Chris Gaither