Microsoft is not privately haggling with Yahoo over the software maker’s rejected $31-per-share buyout offer for the slumping Internet pioneer, Bill Gates said in an interview.
“We sent them a letter and said we think that’s a fair offer. There’s nothing that’s gone on other than us stating that we think it’s a fair offer,” the Microsoft chairman said Monday. “They should take a hard look at it.”
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Microsoft Corp. made an unsolicited offer to buy Yahoo Inc. just over two weeks ago. At the time, the deal was valued at $44.6 billion, but since then, Microsoft’s share price has tumbled 12.8 percent, pushing the value of the cash-and-stock offer closer to $41 billion.
Yahoo spurned the offer and said it “substantially undervalues” the company’s assets. The Web portal business was said to be in talks late last week with News Corp. about a complex deal to push its market value toward $50 billion. Yahoo also was reportedly discussing an advertising partnership with Google Inc.
Most analysts believe Microsoft will do whatever it takes to buy Yahoo. Redmond-based Microsoft has invested heavily in honing its own search engine and advertising technology, but neither it nor Yahoo have helped close the gap with Google, which dominates Microsoft and Yahoo in U.S. search queries and related advertising revenue.
Yahoo is believed to want at least $40 per share, but Microsoft has held firm so far, calling its original bid “full and fair.” Microsoft’s next move could be to take the offer directly to Yahoo’s shareholders, or to attempt a hostile takeover of Yahoo’s board.
Yahoo shares closed at $29.66 Friday. Markets were closed Monday for Presidents Day.
Gates’ comment Monday was in response to a question during a phone interview about an unrelated effort to give students free access to certain Microsoft software.