Yahoo shares fall sharply

 Yahoo Inc. shares fell Monday after the struggling Internet icon revealed that it rejected Microsoft Corp.’s latest purchase offer, made with activist investor Carl Icahn.

The stock shed $1.13, or 4.8 percent, to $22.43 in afternoon trading. In the past year, the stock has traded between $18.58 and $34.08.

On Saturday evening, Yahoo rejected a sweetened Microsoft-Icahn offer made Friday. Icahn, who has no experience running an Internet company, would have been left in charge of Yahoo’s remaining pieces had an agreement to sell the search engine to Microsoft been reached.

Yahoo shares gained 10 percent last week on hopes that Microsoft’s decision to side with Icahn might pave the way for a deal.

Four reasons why Yahoo! shook its head 

1. Yahoo!'s existing business plus its recently signed commercial agreement with Google has superior financial value and less complexity and risk than the Microsoft/Icahn proposal.

2. The Microsoft/Icahn proposal would preclude a potential sale of all of Yahoo! for a full and fair price, including a control premium

3. The major component of the overall value per share asserted by Microsoft/Icahn would be in Yahoo!'s remaining non-search businesses which would be overseen by Mr. Icahn's slate of directors, which has virtually no working knowledge of Yahoo!'s businesses.

4. The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo!. The Yahoo! Board believes these moves would destabilize Yahoo! for the up to … one year it would take to gain regulatory approval for this deal.