In a statement late Monday afternoon, Microsoft responded to Yahoo's rejection of its initial takeover bid as many believed it would, and as the company itself indicated it probably might do: It will ask Yahoo shareholders to consider its proposal.
With no absolute white knight in sight, though with a few candidates for the job having been mulled around, Yahoo's executives may find themselves now pleading their case for independence with their company's own stockholders. As expected, Microsoft plans to pursue its takeover of Yahoo by way of "Plan B:" a direct offer to shareholders to override their own board of directors.
What follows is Microsoft's complete statement, directed not to Yahoo's board of directors but to the general public on behalf of the company:
It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.
We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.
A Microsoft-Yahoo! combination will create a more effective company that would provide greater value and service to our customers. Furthermore, the combination will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising.
The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realize the value inherent in our proposal.