Microsoft willing to resume Yahoo talks

MICROSOFT says it is willing to reopen talks to buy all or part of Yahoo, but only if a new Yahoo board is elected.

Microsoft, which broke off months-long talks in early May to buy the Internet company for $US47.5 billion ($49.7 billion), said it would resume talks immediately if a new board was elected at Yahoo's August 1 stockholder meeting.

Yahoo shares leapt 12 per cent overnight.

The Microsoft statement came after Carl Icahn, a billionaire who owns more than 4 per cent of Yahoo, issued an open letter saying he had "spoken frequently" to Microsoft CEO Steve Ballmer over the last week. Previously, the two had not spoken.

"This is the first concrete confirmation we have that Microsoft is willing to come back to the table," UBS analyst Ben Schachter said.

"It gives Icahn a much stronger hand going into the shareholder vote. It significantly raises his profile and his likelihood for success."

Mr Ballmer told Mr Icahn 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, according to Mr Icahn.

In an interview, Mr Icahn argued that his proposed dissident board slate would make Microsoft feel more secure in risking a large sum of capital to complete the deal during the regulatory approval process.

July 08, 2008 10:40am
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What are the reasons that a Microsoft-Yahoo merger can be considered a monopoly?

What are the reasons that a Microsoft-Yahoo merger can NOT be considered a monopoly?

Why does Microsoft want to buy Yahoo? What does Yahoo have that MS does not have?
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