Microsoft Corp. announced Saturday that it has withdrawn its proposal to acquire Internet portal and search provider Yahoo!
In a letter to Yahoo! CEO Jerry Yang, Microsoft CEO Steve Ballmer said the software giant had been willing to raise its offer to $33 a share—a $2-a-share increase on its initial offer of $31 a share, or $44.6 billion, back in February. But Ballmer said Yahoo! had “insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.”
"We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole. Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees," said Ballmer in statement released Saturday. "Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer.”
Yahoo! had officially rejected Microsoft’s bid on Feb. 11. But it subsequently signaled it would be open to a sweetened offer from Microsoft and later began talks with Time Warner about merging with its AOL unit. Yahoo! also began talks with search giant Google about carrying Google’s search advertising.
Yahoo! closed Friday at $28.67 a share.
In a response to Microsoft’s announcement, Yahoo! chairman Roy Bostock said, “From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft's offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view.”
Yang added, “With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users."
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