Microsoft Corp (MSFT.O) is preparing a
new bid for Yahoo Inc's (YHOO.O) search business and has
approached other media companies about joining it in a deal
that would effectively lead to 's breakup, the Wall Street
Journal said.
By mid-day, CNBC refuted the report of a new approach.
Citing unnamed sources, CNBC said Microsoft has held "no new
talks" and there are "no negotiations," sending Yahoo's shares
up 7 percent. The gain was pared a bit in midday trade.
Quoting people familiar with the discussions, the Journal
said talks with Time Warner Inc (TWX.N) and News Corp (NWSa.N),
among others, were preliminary and unlikely to result in a deal
with Yahoo.
The Journal said that two weeks ago, Microsoft Chief
Executive Steve Ballmer called Yahoo Chairman Roy Bostock to
suggest they meet to discuss a new idea involving other
partners.
Microsoft subsequently canceled the meeting, which Yahoo
took as a sign that Ballmer's efforts to find a partner have so
far failed, the paper said.
Microsoft, Yahoo, Time Warner and News Corp were not
immediately available for comment.
Yahoo rejected a $47.5 billion takeover offer by Microsoft,
and earlier this week questioned whether the software maker was
ever serious about a full-scale merger. However, Yahoo remains
open to discussing any proposal from Microsoft, the paper said.
In the meantime, Yahoo investor Carl Icahn is running a
slate of directors to replace Yahoo's board and has called for
the removal of Chief Executive Jerry Yang ahead of the
company's annual shareholder meeting to be held in Silicon
Valley on August 1.
The activist shareholder has said the company should still
offer to sell itself, though Microsoft has said it is no longer
interested in a full buyout.
Shortly after Microsoft walked away from talks to buy all
of Yahoo, Yahoo had offered to sell itself to Microsoft for
about $33 a share, the Journal reported.
However, representatives for Microsoft have in recent days,
met with Icahn to encourage him to press his proxy contest as a
way to keep pressure on Yahoo to enter into a deal that would
lift its share price, the paper said, citing people familiar
with the matter.
Yahoo shares rose 5.99 percent to $21.41 on Nasdaq. On
Tuesday the stock closed at $20.20, its lowest session-ending
level since January 31, the day before Microsoft first made
public its offer to buy Yahoo.
Microsoft shares fell $1.8 percent, or 49 cents to $26.38.
Microsoft shares closed Tuesday at $26.87, their lowest closing
level since March 2007. In a volatile session, the stock had
dropped to as low as $23.19, its lowest in nearly two years.
(Reporting by Ajay Kamalakaran in Bangalore, additional
reporting by Franklin Paul; Editing by Derek Caney, Leslie
Gevirtz)
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