Microsoft-Icahn-Yahoo Dealings Degenerate Into Trading Public Accusations

In the latest and perhaps strangest escalation of name calling and “he-said/she-said” accusations, Yahoo, Yahoo insurgent shareholder Carl Icahn, and Microsoft have all issued dueling press releases in the wake of the latest Yahoo rejection of the latest, somewhat unexpected Microsoft (now + Icahn) search takeover offer.

Here’s Yahoo’s press release from Saturday explaining the offer rejection:

The proposal was made on Friday evening and Yahoo! was given less than 24 hours to accept the proposal, the fundamental terms of which Microsoft and Mr. Icahn made clear they were unwilling to negotiate. After reviewing the proposal with its legal and financial advisers, Yahoo!’s Board of Directors determined that accepting the proposal is not in the best interests of its stockholders.

Here’s Carl Icahn’s response, issued earlier today:

Over the years I have attempted to make changes at many companies but I have yet to see a company distort, omit and twist events and facts in the manner that Yahoo! has done in their press release issued Saturday night, July 12th.

That was followed by a statement from Microsoft earlier this afternoon:

After considering Yahoo!’s request and taking into account Yahoo!’s previous feedback about our prior search proposal, Microsoft determined late Friday to propose an enhanced search transaction. This proposal included significant revenue guarantees, higher TAC rates, an equity investment and an option for Yahoo! to extend the agreement over a 10-year period.

Microsoft’s proposal did not include changes to Yahoo!’s governance.

At the time Microsoft submitted its enhanced proposal, Microsoft asked that Yahoo! confirm whether it would agree that the enhancements were sufficient to form the basis for the parties to engage in negotiations over the weekend on a letter of intent and more detailed term sheets. This discussion has been mischaracterized as a take it or leave it ultimatum, rather than a timetable in order to move forward to intensive negotiations. Yahoo! informed Microsoft on Saturday that it had rejected the proposal.

It’s hard to know what to say about this mess at this stage of things.