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Washington - Microsoft Corp has reopened talks with Yahoo Inc about a deal that would not involve a full acquisition, just days after billionaire investor Carl Icahn said he would seek to oust Yahoo's board.
In a brief on Sunday, Microsoft said it "has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo", although it left open that possibility.
Microsoft withdrew its original buyout proposal, estimated at $45bn, on May 3 after three months of ultimately fruitless efforts to get Yahoo to agree to a deal.
Afterward company executives, including chairperson Bill Gates, insisted Microsoft would find other ways to expand its online and advertising business to better compete with internet juggernaut Google Inc.
Yet Yahoo has come under intense criticism from large shareholders because of its handling of the Microsoft negotiations, triggering the decision by Icahn to get involved last week.
The activist investor said he would seek to buy up to $2.5bn in Yahoo stock and offer a slate of directors to replace the current board.
In a strongly worded letter to Yahoo's chairperson, Icahn blasted the current board, accusing members of acting "irrationally" and having "completely botched" negotiations with Microsoft.
The pressure put on Yahoo has evidently encouraged Microsoft to reconsider some sort of arrangement and the company would not even rule out a full acquisition offer.
"Microsoft is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo or discussions with shareholders of Yahoo or Microsoft or with other third parties," the company said in its statement.
The software giant originally offered to buy Yahoo in February at a price of $31 a share, but Yahoo executives reportedly held out for $37. Microsoft never raised its offer above $33, or nearly $48bn, in private talks.
Yahoo officials could not immediately be reached for comment.