Microsoft reopens door to talks with a new Yahoo board

Published on Monday 7 July 2008 20:56

MICROSOFT last night said it would be willing to reopen talks to buy all or part of Yahoo but only if a new board is elected.

Yahoo shareholders are due to meet on 1 August for the firm's AGM and Carl Icahn, the billionaire investor who owns 4 per cent of the shares, put forward proposals to oust the board.

Microsoft, which broke off talks in early May to buy the internet company for $47.5 billion (24.1bn), said it would resume discussions immediately if a new board were elected.

Icahn yesterday said he had "spoken frequently" to Steve Ballmer, Microsoft's chief executive, over the past week. Icahn said Ballmer had told him that a big impediment to any Yahoo deal was his concern that the current board could "mismanage" the company while the deal awaits regulatory approval, a process that could take nine months or more.

Icahn said: "You don't have to be Sherlock Holmes to realise there is no great comfort zone between the current Yahoo board and Microsoft.

"During this waiting period for regulatory approval, any acquirer – not just Microsoft – would want a steward they would feel comfortable with."

In response, Yahoo issued a statement saying it continues to be willing to reopen talks with Microsoft, but "we feel strongly" that any deal negotiated between Icahn and Microsoft "would not lead to an outcome that would be in the best interests of Yahoo stockholders".

Yahoo added: "If Microsoft and Mr Ballmer really want to purchase Yahoo, we again invite them to make a proposal immediately".