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Microsoft says it's backing away from Yahoo bid
Seattle Times technology reporter
SEATTLE — After more than three months of posturing and negotiations, Microsoft on Saturday withdrew its proposal to acquire Yahoo.
In a statement released late in the day, Microsoft CEO Steve Ballmer said the company had raised its bid by "roughly $5 billion," but "Yahoo has not moved toward accepting our offer."
"After careful consideration, we believe the economics demanded by Yahoo do not make sense for us," Ballmer's statement continued, "and it is in the best interests of Microsoft stockholders, employees, and other stakeholders to withdraw our proposal."
On Feb. 1, Microsoft offered $31 a share for Yahoo in a cash and stock deal worth $44.6 billion at the time. The bid was part of the company's ongoing efforts to build its online business and catch runaway leader Google.
Yahoo's board rejected the proposal saying it undervalued the company, once the Internet's leading light. In an acquisition dance that dragged on in public statements and leaks to national media, the two sides jockeyed for advantage.
They were reportedly in negotiations on Friday but were still separated by price. Based on Ballmer's statement, Microsoft was willing to raise its offer to $33 a share. Some major Yahoo shareholders were reportedly holding out for $35 to $37 a share.
Ballmer notified Yahoo CEO Jerry Yang in a letter this afternoon.
A person familiar with Microsoft's thinking would not comment on whether the company would pursue a combination with Yahoo at some point in the future.
"The offer is off the table," this person said.
Copyright © 2008 The Seattle Times Company
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