Yahoo, the number two search engine which was supposedly struggling against the threats of billionaire investor, Carl Icahn for a long time after the board members denied the Microsoft deal, has proposed a new deal to sell the company to Microsoft Corp for $22 a share.

Under this new deal proposed by investment fund Mithras Capital, Microsoft would drop off Yahoo’s Asian assets and non-search businesses extract $3 billion worth of cost savings and receive $2.8 billion of tax benefits. This means that if Microsoft wants to go with Yahoo search business acquisition, it will have to pay $10.3 billion for Yahoo’s search business.

The proposal allows Microsoft to buy Yahoo’s search business for $2 billion less than it offered in July.

Incidentally, in July the talks between the two companies disrupted after Yahoo finally denied to all possibilities of acquisition by Microsoft.
 Earlier, Yahoo has also refused the full buy out proposal by Microsoft in May.

As an impact of economic crunch, Yahoo shares are down 36 per cent since the start of August, falling to new five-year lows.

Carl Icahn has appointed three of his nominees as board members and recently held the annual meeting.  According to sources, Yahoo is involved in ongoing talks with Time Warner Inc about buying its AOL unit.

Vinod Negi/ITVoir Network