Microsoft is taking one of its options off the table in its on-again, off-again pursuit of Yahoo. It has told members of the alternate board of directors it had lined up for a possible hostile proxy battle over Yahoo that it won’t be needing their services. The news was delivered to each alternate in a short e-mail this morning from Microsoft’s law firm, Sullivan & Cromwell, according to the Wall Street Journal
Yahoo’s shares have been rising most of this week, after taking an initial hit on Monday. The relative strength in the shares have been partly fueled by hopes for renewed negotiations between Yahoo and Microsoft.
This action represents an important new data point in the battle of wills between the two companies. Is Microsoft really no longer interested in acquiring Yahoo, or is it just trying to signal that it has lost interest to drive down Yahoo’s shares and thus strengthen its negotiating position?