As deadline nears, Yahoo seeks new Microsoft deal

Microsoft said Yahoo has until April 26 to accept its offer without a hostile takeover.

SEATTLE (AP) — Internet icon Yahoo Inc., under pressure of a three-week deadline from Microsoft to accept its $41 billion buyout bid, said Monday it doesn’t oppose a deal with the world’s largest software maker but wants a better offer.

The statement comes after Microsoft warned Saturday that if a deal isn’t reached by April 26 it will launch a hostile takeover at a less attractive price.

In Yahoo’s lengthiest statement about the bid to date, Chief Executive Jerry Yang and Chairman Roy Bostock wrote in a letter to Microsoft CEO Steve Ballmer that the current offer is “not in the best interests of shareholders” of Yahoo.

“We are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders,” Yang and Bostock said in the letter. “Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.”

Microsoft’s offer for Yahoo, made public on Feb. 1, would create a stronger rival to Google Inc., which dominates the online search advertising market.

At the time, the cash-and-stock bid was valued at $44.6 billion, or 62 percent above Yahoo’s market value. As of Friday, the deal was worth just under $41 billion.

Yahoo’s board formally rejected Microsoft Corp.’s bid on Feb. 11, saying it undervalues the company.

In Monday’s letter, Yang and Bostock said Microsoft’s threat to go hostile is “counterproductive and inconsistent with your stated objective of a friendly transaction.”

The Yahoo leaders also dinged Microsoft for implying that the two companies hadn’t discussed the deal since February. Yang and Bostock said the two companies “have had constructive conversations together regarding a variety of topics, including integration and regulatory issues.

“Moreover, Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit,” they wrote.

Yang and Bostock also said they are waiting for Microsoft to provide information that would help them understand regulatory issues that could arise from a deal. They said they it on March 28 after a joint meeting of legal advisers.