Microsoft Withdraws Yahoo! Offer - TheStreet

Microsoft Withdraws Yahoo! Offer

The software giant says it's walking away after Yahoo! rejects a sweetened bid.
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Microsoft (MSFT) - Get Report Saturday said it had withdrawn its offer to acquire Yahoo! (YHOO) after the Internet search company rejected a sweetened bid.

Microsoft released

the text of a letter

from CEO Steve Ballmer to his counterpart at Yahoo!, Jerry Yang. In it, Ballmer writes that Microsoft was willing to raise its offer by about $5 billion, to $33 a share, but says Yahoo! wanted another $5 billion or more, or at least $4 a share above Microsoft's increased bid.

In a press release introducing the letter, Ballmer says, "After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal."

In his letter to Yang, Ballmer says Microsoft decided not to take its offer directly to Yahoo! shareholders because if it did so, Yahoo! would take steps to make itself unattractive as an acquisition.

Shares of Microsoft closed Friday down 16 cents at $29.24. Yahoo! shares ended the session up $1.86 at $28.67.

This article was written by a staff member of TheStreet.com.