Microsoft (MSFT) issues its own statement about the Yahoo (YHOO) talks breaking down. Key points:
- We were prepared to do a search-only deal worth more than $33. This is presumably the byzantine three-part transaction described a month or so back, in which Microsoft would take Yahoo’s search business, Yahoo would recapitalize its display business, and Yahoo’s Asian assets would be sold off. This deal never made any sense, in our opinion, so we don’t blame Yahoo for rejecting it.
- We’re still prepared to do this deal–unless/until Yahoo does a search deal with Google, in which case all bets are permanently off.
People close to Microsoft say that, during this final round of negotiations, Yahoo eventually offered to sell itself for $33, the same price as the offer it turned down a month ago. But Microsoft no longer has any interest in buying the company at this price, sources say–in part because Yahoo’s business continues to deteriorate.
We strongly believe that Jerry Yang and Yahoo could have reached a deal with Microsoft at $34-$35 in mid-Febrary if they had not been so dead-set against the idea. Even with a Google search deal all but confirmed, the stock closed this evening at $23.50.