Home : Networking : News

Microsoft, Yahoo stay silent after deal deadline

Although the software giant's ultimatum to reach a deal to acquire the internet company has expired, it seems the stalemate is set to continue with neither attempting to negotiate.

By Miya Knights, 29 Apr 2008 at 12:08

gallery

Microsoft late yesterday confirmed neither it, nor its proposed takeover target Yahoo, had scheduled any executive meetings in the wake of their failure to agree a deal over the past weekend.

The software vendor had given the internet company until 26 April to respond to its $42.6 billion or $31 per share (£22.4 billion or £15.58 per share) offer. But after suggestions that Microsoft may either pursue a hostile, proxy fight or drop its bid to seek acquisition alternatives passed without action, a lack of communication or comment currently characterises the stalemate between the two companies.

Microsoft late yesterday was still referring enquiries about its next move to comments made by its chief financial officer, Chris Liddell made last week as it released its third-quarter earnings. At the time, he indicated that the three-month stalemate may lead it to abandon any takeover attempt altogether.

At the time, Liddell said: "Unless we make progress with Yahoo towards an agreement by this weekend, we will reconsider our alternatives." He added that the transaction had been "anything but speedy" and referred to Yahoo's "unrealistic expectations of value".

Yet the internet company's share price had soared from $19.18 (£9.64) on 1 February - the day before Microsoft announced its intentions - to $29.87 (£15.01) on 11 February, Yahoo's board formally rejected the offer. Yesterday, its shares were trading at $26.43 (£13.28) each.

In the meantime, Yahoo has been reportedly been seeking a variety of potential tie-ups with media and internet companies, including News Corporation, Google and AOL to fend off Microsoft's unwanted advances, having previously announced job cuts to maintain its competitiveness.

And on 5 March Yahoo also lifted its deadline for nominating directors set for the following week, in order to discourage Microsoft from seeking to put more supportive board members in place in the event of a proxy fight. And it has since refused to name a date for its next shareholders' meeting.

But undeterred, Microsoft issued a letter on 5 April threatening Yahoo's board of directors with a proxy battle if a deadline had not been reached. But the deadline since passed last Saturday with apparently no moves on either side to resolve the deadlock so far.