"Yahoo management's position is still that Microsoft's bid is too low and undervalues the company," said Bernstein analyst Charles Di Bona in a note to clients. "Investors are becoming increasingly skeptical and there appears to be growing concern that this view is both unrealistic and self-interested on the part of Yahoo's management."
Microsoft shares rose 12 cents to $29.28 on Nasdaq.
If the two sides can agree to a deal, it would be the biggest takeover in the high-tech industry.
The deal drama has spurred Chinese Internet firm Alibaba Group to speed up plans to buy back a near 40 percent stake owned by Yahoo. Alibaba, parent of Alibaba.com (1688.HK: Quote, Profile, Research), seeks to calm Beijing's fears that a Microsoft deal would increase foreign influence over China's leading Internet firms.
REGULATORY ISSUES
In their letter, Yang and Bostock charged that Ballmer's letter "mischaracterizes the nature" of their talks so far, calling his assertion that Yahoo had refused to enter into negotiations to conclude an agreement "particularly curious."
"Moreover, Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit," the letter said.
Directors of Sunnyvale, California-based Yahoo continue to explore alternatives, the company said. Talks on a potential alliance with Time Warner Inc's (TWX.N: Quote, Profile, Research) AOL have intensified, according to a person familiar with the matter.
Yahoo shareholders and analysts say the company's best options are to find an ally to help demonstrate Yahoo is worth more as an independent player, or surprise the market with a strong show in its quarterly results on April 22.
But the consensus on Wall Street is that no "white knight" will emerge to whisk Yahoo away from Microsoft and its proposed cash-and-stock offer currently valued at $42.2 billion.
Yahoo's Yang also criticized Microsoft for not providing it with data that would help the companies identify regulatory issues that might be associated with any merger. Yahoo said it has already provided Microsoft with such details.
(Editing by Brian Moss and Maureen Bavdek)
Source : reuters.com
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