Microsoft Saturday yanked its proposal to acquire Yahoo, saying the struggling Internet pioneer refused to budge on price despite the software giant upping its offer to nearly $50 billion. Talks aimed at resolving corporate dueling that began with Microsoft's offer on February 1 to buy Yahoo for 31 dollars per share ended with the two firms unable to close a multi-billion-dollar gap in price expectations. “Despite our best efforts, including raising our bid by roughly five billion dollars, Yahoo has not moved toward accepting our offer,” Microsoft chief executive Steve Ballmer said in a letter posted on his company's website. “After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal.” In the letter, addressed to Yahoo chief executive Jerry Yang, Ballmer said Microsoft told Yahoo it was willing to raise its offer to 33 dollars per share. The price increase added approximately five billion dollars to the bid, originally valued at 44.6 billion dollars, and reflected a premium of more than 70 percent compared to the Yahoo share price on January 31, Ballmer noted. “Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another five billion dollars or more, or at least another four dollars per share above our 33 dollars offer.” Ballmer said that Microsoft did not intend to go hostile and buy the company directly from shareholders. “It is clear to me,” Ballmer wrote, “that it is not sensible for Microsoft to take our offer directly to your shareholders.” Yahoo downplayed Microsoft's decision, releasing an optimistic statement that dismissed the unsolicited takeover offer as a “distraction.” “With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users.”
