Microsoft Corporation went public on Friday, February 1, 2008, with an offer to buy Yahoo Inc. for $44.6 billion at $31 per share. The Yahoo! Board through an official note conceded that it had received an unsolicited proposal from Microsoft to acquire the company. The Company also added that its Board of Directors would evaluate this proposal carefully.
The approach, outlined by Steve Ballmer, CEO, Microsoft, in a letter sent on Thursday night to Yahoo!'s board and published Friday, is aimed at pressing Yahoo! to agree to a combination it rejected a year ago. The offer comes as Yahoo! continues to struggle against Google in the race for online advertising revenue and Internet search market share despite efforts to upgrade its systems.
“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” Ballmer said in the letter sent to the Yahoo! Board.
An official communiqué from Yahoo! said that “it has received an unsolicited proposal from Microsoft to acquire the company. The company said that its Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!'s strategic plans and pursue the best course of action to maximize long-term value for shareholders.”
Microsoft further noted that the company had developed a plan and process that would include the employees of both companies to focus on the integration of the combined business. Microsoft intends to offer significant retention packages to Yahoo! engineers, key leaders and employees across all disciplines.
Microsoft also believes this proposed combination would receive all necessary regulatory approvals and expects that the proposed transaction would be completed in the second half of calendar year 2008. Microsoft is also committed to working closely with Yahoo! management and it’s Board of Directors as they, along with Yahoo! shareholders, evaluate this compelling proposal.