Here’s a footnote for the current chapter of the Microsoft-Yahoo acquisition saga. Microsoft this week issued a statement to “set the record straight” about Yahoo’s July 12 rejection of the latest acquisition offer from Redmond.
Rather than trying to paraphrase, here’s Microsoft in its own words, including references to “activist investor” Carl Icahn:
"Among other things, the enhanced proposal for an alternate search transaction that we submitted late Friday was submitted at the request of Yahoo! Chairman Roy Bostock as a result of apparent attempts by Mr. Icahn to have Microsoft and Yahoo! engage on a search transaction on terms Mr. Icahn believed Microsoft would be willing to accept and which Microsoft understands Mr. Icahn had discussed with Yahoo!"
Well that certainly clears things up. That has to be the longest sentence without punctuation in history. Are Microsoft’s comma and period keys in the repair shop? Take a breath, will ya?
The statement prattles on about the back-and-forth between Steve Ballmer and Yahoo chairman Roy Bostock that led to Microsoft’s “enhanced search transaction” proposal, which it said included “significant revenue guarantees, an equity investment and an option for Yahoo to extend the agreement over a 10-year period.” What it left out, according to Yahoo, was that it gave the search company a non-negotiable 24 hours to think about it. Microsoft’s statement was silent on Yahoo’s rebuff, dwelling instead on irrelevant minutia.
Microsoft is clearly a different company without Bill Gates at the controls.
The Yahoo statement, on the other hand, was extremely clear and specific as to why it was rejecting Microsoft’s offer. Ridiculous deadline aside (along with the false assertion that Yahoo referred to the proposal as an ultimatum), Yahoo considered Microsoft’s acquisition scheme “a complex restructuring of Yahoo,” and that its “existing business, plus its recently signed commercial agreement with Google has superior financial value and less complexity and risk.” That portion surely had Ballmer going bananas.
Yahoo further stated that the deal would have precluded any potential sale of Yahoo in full, would require Yahoo’s remaining non-search business to be run by Icahn’s minions, and called for “the immediate replacement of the current board and removal of the top management team at Yahoo.” Gee, that’s a plan huh? Kick out everyone at the top and run the company with outsiders for up to a year while you’re waiting for regulatory approval. Pure genius.
“Microsoft’s proposal did not include changes to Yahoo’s governance,” was Microsoft’s official denial (as well as being shortest sentence and paragraph in the statement). It was also totally absurd. Wasn’t one ofBallmer’s earlier concerns that Yahoo’s current board would “mismanage the company” and put Microsoft’s money at risk? So of course any new proposal would include management changes.
We’re not idiots, Mr. Ballmer. Et tu?