Microsoft, Yahoo meet to avert hostile takeover

LOS ANGELES, May 2 (Xinhua) -- Representatives from Microsoft and Yahoo met on Friday to avert a hostile takeover, sources close to the meeting said.

The talks were confidential and were conducted in a serious atmosphere, said the sources who refused to be named.

Microsoft has expressed willingness to pay more than the 44.6 billion U.S. dollars it offered on Jan. 31, the sources were quoted as saying by the Los Angeles Times.

Microsoft had increased its bid by "several dollars" a share. However, no deal was imminent as differences still remained, said the sources.

No further details were available.

Microsoft and Yahoo declined to comment on the issue.

Yahoo shares gained 1.86 dollars, or 7 percent, to 28.67 dollars on reports that the two companies were closer to a deal, as investors hoped Yahoo would exact a higher price from Microsoft. Microsoft fell 16 cents to 29.24 dollars.

Microsoft had set April 26 as the deadline for Yahoo to respond to Microsoft's offer, or it would launch a proxy fight to take control of Yahoo's board of directors. But this week passed with no escalation of the takeover fight, which has been dragging on for three months.

Yahoo, whose board of directors met on Friday, has been trying to wring at least a few dollars more per share out of Microsoft. The negotiations might accomplish that without the distraction of a long public battle, according to the Los Angeles Times.

Yahoo had repeatedly rejected Microsoft's offer as being too low. It has also aggressively sought alternatives such as a tie-up with Time Warner Inc.'s AOL unit and a partnership with rival Google Inc.