Yet more shenanigans from Microsoft over the Yahoo! takeover
Microsoft Sends Letter to Yahoo! Board of Directors
Microsoft CEO Steve Ballmer recently sent a letter to the members of Yahoo!’s board of directors basically telling them they have three weeks to make up their mind or Microsoft is going to get nasty. Here’s a play-by-play of the letter:
Dear Members of the Board:
It has now been more than two months since we made our proposal to acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.
That’s probably because your offer sucked, Steve. Not to mention that even at a 62% premium the offer is still undervalued. Price alone isn’t a valid measure of the value of this company.
While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement. We understand that you have been meeting to consider and assess your alternatives, including alternative transactions with others in the industry, but we’ve seen no indication that you have authorized Yahoo! management to negotiate with Microsoft. This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.
So it’s all about the shareholders again? Where does my voice come into this? Do consumers have a choice in this? Didn’t think so.
During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.
The whole industry has declined. And the publicity surrounding your bully tactics and possible hostile takeover of Yahoo! hasn’t helped either. Yahoo! is doing what it can to be creative and branch out into other areas in an effort to expand their business and offer their customers more choice. Hmm…seems like a contradiction of that last sentence. In other words, only Microsoft can make the right choices and adopt new plans that give consumers better choices.
By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.
Again with the whole “It’s all about the shareholders” talk. This sort of corporate bullshit and old-school management style is what’s stifling competition, bub. Google is running off of a different mindset and different style of management and Yahoo! is doing it’s best to play catch-up. Best get with the program.
Given these developments, we believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement on a combination of our companies that will deliver superior value to our respective shareholders, creating a more efficient and competitive company that will provide greater value and service to our customers. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.
Your arrogance is overwhelming.
As I’ve said on my blog regarding this very thing, Yahoo! and Microsoft are two different companies with drastically different philosophies using completely different technologies. How these two companies can offer such superior value after the fact is likely to be an impossible task. If the Yahoo! board doesn’t see that then the company is surely sunk and they might as well let you gut it like a fish, Steve.
It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!’s shareholders and employees. We think it is critically important not to let this window of opportunity pass.
Sincerely,
Steven A. Ballmer
Man, talk about a contradiction. Steve, you used to scream that it’s all about “Developers! Developers! Developers!”. Now, with this whole Yahoo! mess, it’s very clear that it’s all about “Shareholders! Shareholders! Shareholders!”. Makes me sick.
