Microsoft has warned the Yahoo! board of directors that they have three weeks to come to an agreement with Microsoft or that it would go directly to the shareholders and push for the election of a new board of directors through a proxy fight. The letter comes some two months after Microsoft made its original offer (valued at about USD$44 billion at the time).
Since then, Yahoo! has explored alternative options with companies such as Google and Time Warner Inc’s AOL. Unfortunately, no worthwhile alternatives have emerged to date and Microsoft is getting impatient.
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.
Microsoft warns that a hostile takeover will likely have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal. In other words, the offer won’t be as sweet.