Microsoft has ended its hostile bid for Yahoo today, withdrawing its $46 billion USD offer and announcing it will no longer bid for the company.
A couple of days ago the software maker upped its bid $5 billion USD, a 70 percent premium compared to its inital offer in January.
“After careful consideration, we believe the economics demanded by Yahoo do not make sense for us,” said Microsoft CEO Steve Ballmer.
In an open letter to Yahoo CEO Jerry Yang, Ballmer said that Yahoo wanted at least a $48 billion USD offer, and that the company should take the offer directly to the shareholders. Ballmer said that would not be “sensible.”
“This approach would necessarily involve a protracted proxy contest and eventually an exchange offer,” Ballmer added. “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.”
Yahoo officials appear very happy with Microsoft’s latest decision.
“Our independent board and our management have been steadfast in our belief that Microsoft’s offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view,” Yahoo chairman Roy Bostock said.