"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," Yahoo said in a statement last night.
Yahoo had received the joint proposal from Microsoft and Icahn, an arrangement that would include the acquisition of the internet major's search business by Microsoft and the rest of the company by Icahn.
"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 Icahn had made clear they were unwilling to negotiate," Yahoo said.
The terms included the immediate replacement of Yahoo's board and removal of top management, the statement said, terming the proposal completely "absurd and irresponsible". "This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo's stockholders in mind," Yahoo Chairman Roy Bostock said.
"Yahoo's board remains open to any transaction that delivers full value to our stockholders - we just do not believe such a transaction should be dictated by Microsoft and a single short-term investor," the statement added.
Yahoo said a transaction to acquire the whole company would be much more straightforward and involve far less risk than the new proposal or any similar alternative.
