Microsoft keeps up the pressure on Yahoo

Software giant takes alternative route to reopen takeover talks

Microsoft has been in talks with Carl Icahn

Software giant Microsoft is interested in reopening talks to buy all or part of Yahoo – but only if a new board is appointed to the internet search provider.

Industry figures now predict a full-scale assault from rogue Yahoo shareholder Carl Icahn to try to unseat Yahoo's chief executive Jerry Yang and his board.

Microsoft said it held talks with Icahn last week, apparently as a last resort after failing to reach any agreement through other channels.

Icahn has written to Yahoo's board confirming the talks.

Yahoo said a sale through Icahn of any part of the business was not in the best interests of the shareholder, but that it was still open to negotiations through the existing board.

Yahoo's shares rose 12 per cent to $23.83 (£12.04) on the news – still well below Microsoft's previous offer price of $33 (£17) per share.