Microsoft and Yahoo: Road to Nowhere

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Jan. 29 Yahoo shares trade at about $19 per share.
Feb. 1 Microsoft proposes Yahoo buyout for $31 per share ($44.6 billion).
Feb. 5 Microsoft announces that it may borrow money to buy Yahoo.

Feb. 8 Yahoo stock prices hit $29.04 per share.
Feb. 11 Yahoo’s board rejects Microsoft’s offer, saying the bid is too low.
Feb. 14 Reports claim that Yahoo has held talks with News Corp. about a possible merger, focusing on News Corp.’s MySpace.

April 5 Microsoft imposes a three-week deadline on Yahoo. In a letter to Yahoo’s board, Microsoft states, “If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board.”
April 24 Microsoft CFO Chris Liddell issues an ultimatum about the three-week deadline.

April 26 The three-week deadline passes without a Yahoo response.
May 3 Microsoft withdraws its bid for Yahoo. In a letter to Yahoo CEO Jerry Yang, Microsoft CEO Steve Ballmer writes, “After giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft.”

May 3 Yang calls the Microsoft proposal “a distraction” that Yahoo can put behind it.
May 5 The Monday after Microsoft’s weekend withdrawal, Yahoo’s stock price drops about 16 percent.
May 5 Two public pension funds pledge to pursue a class-action lawsuit against Yang and the other members of the Yahoo board of directors, seeking financial redress for what they claim is the Yahoo directors’ breach of fiduciary duties in rebuking Microsoft’s proposal.

Summer 2008 Yahoo holds its annual shareholder meeting.

Source: eWEEK reporting