Yahoo rejects Microsoft's bid ultimatum

Yahoo Inc. has rejected a three-week deadline from Microsoft Corp. to accept a $44.6 billion takeover bid, but said it was open to a sweetened offer from the software giant or another bidder, the Agence France Presse reported.

In a letter send to Microsoft CEO Steve Ballmer, Yahoo board chairman Roy Bostock and CEO Jerry Yang said the proposal is not the best interest of the search engine company and its stockholders. "We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis," the letter said.

The letter came in response to an ultimatum issued by Microsoft Apr. 5 for Yahoo to accept its takeover offer in three weeks or face a shareholder proxy fight.

In its open letter to the Yahoo board of directors, Ballmer accused the Yahoo of avoiding serious negotiations over its unsolicited February 1 bid and warned that any further delays could result in a less attractive offer for Yahoo.

"We believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement," Ballmer said in 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."