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Microsoft open to Yahoo acquisition "with new board"

Microsoft has revealed it would consider proceeding with an acquisition of Yahoo if its shareholders elect a new board next month.

Microsoft said in a statement it would be prepared to enter into discussions to purchase Yahoo's search business or the whole company "immediately after Yahoo's shareholder meeting" on 1 August, if a new board is elected then.

The software giant said it discussed a possible agreement between Microsoft and Yahoo, with billionaire investor Carl Icahn, who has spent millions acquiring a stake in Yahoo in recent months, and who is pushing Yahoo shareholders to accept a new deal with Microsoft.

Icahn sent an open letter to Yahoo's shareholders yesterday (7 July) claiming that Microsoft chief executive Steve Bullmer thought a deal could be "risky" with the current management in place.

In the letter, Icahn stated: "I strongly believe that in very short order, the new board would, subject to its fiduciary duties, be presenting to shareholders either a purchase offer for the whole company, or a very attractive offer to purchase Search with large guarantees."

Yahoo said its current board "continues to stand ready to enter into negotiations with Microsoft Corporation for an acquisition of Yahoo" and urged the business to make an immediate offer. But it claimed that a deal between Microsoft and Icahn would "not lead to an outcome that would be in the best interests of Yahoo's stockholders".

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