Yahoo today provided a measured response to Steve Ballmer’s Saturday ultimatum. Leaving aside the rebuttal of some of Ballmer’s assertions in his letter to Yahoo’s board of directors, here’s the gist:
Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.
In conclusion, please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing. Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value.
This response very neatly and cleanly invokes the ultimate defense of “maximizing shareholder value” without self-serving fluff or reckless promises. However, it is nonetheless weakened by Yahoo’s recent poor performance.
One interesting point in the full text is a reference to Microsoft’s not having satisfied Yahoo’s concern over regulatory issues which is the basis for the “uncertainty of closing” remarks above. It hasn’t been revealed exactly what issues these are, but for companies with the reach of Yahoo and Microsoft, I bet I could find a market in a country somewhere in the world where an acquisition could be considered a restraint of trade. That sort of problem could quickly be fixed by a spinoff, but perhaps Yahoo has a deeper concern in mind.