MICROSOFT HAS hardened its line in efforts to acquire Yahoo, promising an all-out hostile takeover battle before the end of the month and hinting that it would cut the value of its offer if negotiations do not start soon.
In a letter to Yahoo's board on Saturday, Steve Ballmer, Microsoft chief executive, wrote: "The substantial premium reflected in our initial proposal anticipated a friendly transaction with you."
Mr Ballmer noted: "If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal."
A person close to Microsoft refused to confirm that this meant the company would cut the value of its original offer but called Mr Ballmer's letter "self-explanatory".
The value of Microsoft's cash-and-stock bid has already slipped from its original $31 a share as the software company's own stock has fallen, taking it to $29.36 a share at Friday's close, or about $42 billion (€27 billion).
In his letter, Mr Ballmer argued that in the two months since Microsoft first revealed its bid, "the public equity markets and overall economic conditions have weakened considerably, both in general and for other internet-focused companies in particular".
Yahoo will make another attempt to paint Microsoft's unsolicited offer as inadequate today as it unveils a new technology platform that executives claimed would create a more open network on the internet.
Called AMP, the new system will give online publishers an automated way to place advertisements on each others' sites.
The internet company said it planned a third-quarter launch for the system, having previewed it with advertising executives in February.
The platform is behind rosier revenue forecasts presented by management to an investor roadshow last month.
- (Financial Times service)
