Microsoft opens potential merger talks with Yahoo?

by Stevie Smith - May 19 2008, 11:29

Following an aggressive acquisition battle that stretched for more than two months, Microsoft Corp. removed its $47.5 billion bid for Internet giant Yahoo Inc. on May 03, leaving the American software titan somewhat adrift in terms of landing a new weapon in its efforts to haul back Google’s dominance in the online ad world.

However, it would appear that Redmond-based Microsoft is now looking to adopt a new approach vector in finally getting Yahoo to play ball.

While withholding any potentially juicy specifics, Microsoft has confirmed via an official statement that is has indeed revived talks with Yahoo with a view to bolstering the positioning of both companies in the online search and advertising space, which could very well lead to a renewed takeover bid.

From Yahoo’s side, the Internet heavyweight has similarly offered up a statement outlining that its board is looking into a number of ways of maximising the company’s value and is still open “to pursuing any transaction which is in the best interest of our shareholders.”

Remaining open to an eventual acquisition -- most likely from Microsoft -- would certainly appear to be Yahoo’s core standpoint in light of mounting pressure asserted upon the company by its shareholders.

The Associated Press reports that billionaire activist investor Carl Icahn is threatening to replace Yahoo’s current board of directors unless the company moves to formulate an amicable takeover deal with Microsoft ahead of an upcoming July 03 shareholder meeting.

Citing a pair of anonymous individuals closely linked to the revived talks, AP notes that Microsoft has not yet formally touched based with Icahn but did make its move to breathe fresh life into the Yahoo association after Icahn’s threat of shareholder mutiny came to light.

However, while Icahn is hovering with a cocked corporate scythe and Microsoft is slowly rubbing its hands in anticipation from the sidelines, Yahoo chairman Roy Bostock only last week reiterated that the company will not bow to Microsoft for less than $37 USD per share, a considerable $5.5 billion USD jump on the $33 USD per share Microsoft was offering.

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