Microsoft seeks allies for Yahoo break-up: WSJ
(NEW YORK) Microsoft Corp is preparing a new bid for Yahoo Inc’s search business and has approached other media companies about joining it in a deal that would effectively lead to Yahoo’s break-up, the Wall Street Journal said.
Microsoft has already held talks with Time Warner Inc and News Corp, among others, the newspaper quoted people familiar with the discussions as saying.
The talks are preliminary and unlikely to result in a deal with Yahoo, the paper said.
The Journal said that two weeks ago, Microsoft chief executive Steve Ballmer called Yahoo chairman Roy Bostock to suggest that they meet to discuss a new idea involving other partners.
The meeting was subsequently cancelled by Microsoft, which Yahoo took as a sign that Mr Ballmer’s efforts to find a partner have so far failed, the paper said.
Neither Microsoft, Yahoo, Time Warner nor News Corp were immediately available for comment.
Yahoo rejected a US$47.5 billion takeover offer by Microsoft, and earlier this week questioned whether the software maker was ever serious about a full-scale merger. However, Yahoo remains open to discussing any proposal from Microsoft, the paper said.
In the meantime, Yahoo investor Carl Icahn is running a slate of directors to replace Yahoo’s board and has called for the removal of chief executive Jerry Yang ahead of the company’s annual shareholder meeting to be held in Silicon Valley on Aug 1.
The activist shareholder has said that the company should still offer to sell itself, though Microsoft has said that it is no longer interested in a full buyout.
However, representatives for Microsoft have in recent days, met Mr Icahn to encourage him to press his proxy contest as a way to keep pressure on Yahoo to enter into a deal that would lift its share price, the paper said, citing people familiar with the matter.
In electronic trading before the Nasdaq open, Yahoo shares rose about 6 per cent, or US$1.30, to US$21.50. On Tuesday, the stock closed at US$20.20, its lowest session-ending level since Jan 31, the day before Microsoft first made public its offer to buy Yahoo.
Microsoft shares were little changed in pre-opening trade, up two cents at US$26.89 on volume of just 400 shares. Microsoft shares closed on Tuesday at US$26.87, their lowest closing level since March this year. In a volatile session, the stock had dropped to as low as US$23.19, its lowest in nearly two years. — Reuters
Source : Business Times - 03 July 2008
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