Microsoft has told Yahoo! that it plans a hostile takeover bid if the company does not agree to a merger in the next three weeks.
Microsoft wants Yahoo! to accept its $31 (£15.50) a share bid or the software company will approach the internet firm’s shareholders directly. Microsoft warned it may lower its price if it has to “go hostile” with its offer.
The ultimatum, made in an email sent by Microsoft chief executive Steve Ballmer to Yahoo!’s board of directors, capitalises on recent volatile conditions in the global stock market which have further depressed Yahoo!’s already poorly performing share price.
The impact of the global credit crunch on stockmarkets has reduced the value of Microsoft’s cash and shares bid from its original level of $44.6 billion to about $42 billion.
Since Microsoft went public with its offer in February (see Microsoft Bids $44.6bn For Yahoo!), Yahoo! has been trying to find a so-called white knight to merge with, to see off Microsoft’s advances. It has held talks with News Corp and AOL but so far without success (see Yahoo! Reopens Talks With AOL).
The board of Yahoo!, which was last night considering its options, is under intense pressure to accept the Microsoft offer, which at the time represented a premium of 62% to Yahoo!’s share price.
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