SAN FRANCISCO — After more than five months of sparring, the battle for control of Yahoo Inc. has turned into a bare-knuckles brawl with a whiff of desperation hanging over all the key combatants.
The showdown intensified late Saturday after Yahoo revealed that it had spurned Microsoft’s latest attempt to buy its online search engine in a joint proposal made with activist investor Carl Icahn, who is leading a shareholder rebellion to remove Yahoo’s board.
Icahn would have been left in charge of Yahoo’s remaining pieces had an agreement been reached.
“It’s not surprising that Yahoo would reject an offer like that,” Gartner Inc. analyst Andrew Frank said Sunday. “It would be just too complicated to do.”
Microsoft declined to comment Sunday. Icahn didn’t respond to requests for comment.
Yahoo’s explanation for rebuffing Microsoft left little doubt that Yahoo and Icahn are willing to explore options they had scorned as they appeal to Yahoo shareholders before a pivotal Aug. 1 vote.
The shareholders are being asked to either support the current Yahoo regime that has overseen the Internet icon’s recent struggles or roll the dice on an alternate board led by Icahn in hopes of finally working out a deal with Microsoft.
Hoping to fend off the revolt, Yahoo’s board is now willing to sell the entire company to Microsoft for $47.5 billion, $33 per share — a price it rejected as too low 10 weeks ago. But Microsoft has said it has no interest in buying Yahoo in its entirety as long as the company’s current board is in place.
Yahoo shares sat Friday at $23.57, after rising 10 percent last week.
