Yahoo sheds new light on Microsoft talks

Yahoo is offering a new account of its battle with Microsoft

Yahoo has offered a full account of its recent acquisition talks with Microsoft in a filing on Monday to the US Securities and Exchange Commission.

The filing included a copy of a presentation to shareholders in which Yahoo makes its case for opposing a takeover bid by Carl Icahn, and a defence of its actions in the ill-fated negotiations with Microsoft.

Shareholders will vote in August on whether to keep the current board or replace it with a group hand-picked by Icahn who has vowed to pursue a full sale to Microsoft.

But Yahoo has now claimed that Microsoft had never seriously intended to purchase the whole company.

"Microsoft was unresponsive to multiple requests," Yahoo said in the presentation. "The record casts doubt on whether Microsoft was ever committed to a whole company acquisition."

Instead, the board claims that Microsoft had offered a "hybrid" plan in which only Yahoo's search business would be acquired.

The hybrid plan was left on the table by Microsoft after talks for a full transaction officially ended in June.

The proposal would see Microsoft pay $1bn upfront and an additional $8bn investment in exchange for exclusive control over Yahoo's search business for the next 10 years.

Yahoo maintained that Microsoft's proposal "did not make sense for Yahoo either financially or strategically".

Yahoo also lashed out at Icahn, saying that the shareholder's depiction of the Microsoft talks "misrepresents the manner in which we negotiated" and countering Icahn's demand that chief executive Jerry Yang be replaced.

"Jerry is a key driver and facilitator of our strategic plan," the company said.

Yahoo also attacked Icahn's investment history, noting that only three of the 15 companies in which Icahn has invested have seen an increase in stock value since his arrival.

Shareholders will decide the fate of the board at the annual meeting on 1 August.