Yahoo was given less than 24 hours to consider the Friday evening approach after the two interested parties made it clear they were not open to negotiation.
Yahoo’s board rejected the offer saying it was not in the best interests of its stockholders.
Roy Bostock, Yahoo chairman, described the partnership of Microsoft and Icahn as an odd and opportunistic alliance, and said it had anything but the interests of Yahoo’s stockholders in mind.
He added: Clearly, Microsoft, having failed to advance in search, is aligning with the short-term objectives of Mr. Icahn to coerce Yahoo into selling its core strategic search assets on terms that are highly advantageous to Microsoft, but disadvantageous to Yahoo! stockholders.
He called the duo’s behaviour erratic and unpredictable and said Yahoo would not be bludgeoned into a transaction.
In a statement, bosses at Yahoo outlined their reasons for rejection, which included the consensus that its recent commercial agreement with Google has superior financial value and less complexity and risk than the Microsoft/Icahn deal.
It was also decided that selling off some of its business to Microsoft would preclude a potential sale of all Yahoo with a control premium, while concerns were raised that Icahn’s directors, who would oversee Yahoo’s remaining non-search business, had virtually no working knowledge of the business.
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