Microsoft says Yahoo has three weeks to negotiate a decent deal, after which time Microsoft is going to get medieval on its ass. The company sent out a letter to Yahoo's board, whining about how there hasn't been any meaningful progress in negotiations, and in the meantime, the equity markets are tanking.
From the letter:
If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.But as we seem to recall, Yahoo did respond to Microsoft in February -- its consistent message has been that the Microsoft offer "substantially undervalues" the company. And while Microsoft argues that a hostile bid will have "an undesirable impact" on Yahoo, a hostile proxy battle is the surest path to mutually assured destruction. Microsoft shares have already fallen more than 10 percent since the company first sprang its unsolicited bid on Yahoo, and market research has shown that it can take years before companies recover from a hostile proxy battle. Nothing good can come of it -- it's an expensive distraction that could result in a mass exodus and leave both companies worse off than they were before.