Microsoft Yahoo! deal not dead yet

Microsoft may reopen talks with Yahoo! about a possible takeover, if a new board of directors is elected at the forthcoming shareholder meeting, according to a statement released yesterday.    The software giant has said it is still interested in a deal with Yahoo!, after discussions with billionaire investor Carl Icahn last week.    The on-again, off-again saga has been in the news since January, when Microsoft offered to buy Yahoo! for $47.5 billion. Yahoo! demanded a higher price, and Microsoft then offered to buy Yahoo's search business for $1 billion and take an $8 billion stake in its remaining operations.    When Yahoo! rebuffed Microsoft again last month in favor of a deal with Google, prospects of a link-up between them seemed to have evaporated.   Icahn, however, who has been a fierce critic of the Yahoo! board over what he called their “botched” negotiations with Microsoft, is taking action to replace the board at the shareholders meeting, originally scheduled for 3 July, but since postponed until 1 August.   “Despite working since January 31 of this year, as well as in the early part of last year, we have never been able to reach an agreement in a timely way on acceptable terms with the current management and Board of Directors at Yahoo!” says the Microsoft statement.    “We have concluded that we cannot reach an agreement with them. We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the “Search” function with large financial guarantees or, in the alternative, purchasing the whole company.”   Microsoft said it would not engage in further commentary on issues of price or other terms prior to the shareholder meeting because it respects the right of shareholders to determine the destiny of their own company, but said it welcomed the interest shown by Mr. Icahn and “will be prepared to enter into discussions immediately after Yahoo!’s shareholder meeting if a new board is elected.” Read the Microsoft statement in full here.       *          *          *