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Microsoft withdraws proposal to acquire Yahoo

Microsoft has withdrawn its proposal to acquire Yahoo. In January 2008, Microsoft had made an unsolicited offer to buy Yahoo for $44.6 billion. Yahoo later rejected the offer saying Microsoft’s bid ‘substantially undervalued’ the company. Recently, Microsoft raised its bid by about $5 billion but now it appears that Yahoo wanted Microsoft to further raise its bid by another $5 billion or more, raising the acquisition size to about $55 billion.

Microsoft has withdrawn its proposal to acquire Yahoo. In January 2008, Microsoft had made an unsolicited offer to buy Yahoo for $44.6 billion. Yahoo later rejected the offer saying Microsoft’s bid ‘substantially undervalued’ the company. Recently, Microsoft raised its bid by about $5 billion but now it appears that Yahoo wanted Microsoft to further raise its bid by another $5 billion or more, raising the acquisition size to about $55 billion.

“We clearly indicated to Microsoft that we were open to a transaction but only if it were on terms that fully recognized the value of Yahoo and was in the best interests of our stockholders,” Jerry Yang, CEO, Yahoo, has said. “With Microsoft’s withdrawal, we will be better able to focus our energy on growing our industry leadership and maximizing value for stockholders.”

Steve Ballmer, chief executive officer, Microsoft, has said, “Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer. We believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal.”

“We have a talented team in place and a compelling plan to grow our business through innovative new services and strategic transactions with other business partners. While Yahoo would have accelerated our strategy, I am confident that we can continue to move forward toward our goals,” Steve Ballmer has added.

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