Yahoo! has rejected a joint proposition from Microsoft and US tycoon Carl Icahn, describing the offer as “ludicrous”.

The Microsoft/Icahn offer would have seen the Yahoo! search business bought by the software giant and the rest of the company passing into the hands of Mr Icahn, who owns five per cent of the group already.

Reiterating that the board would only negotiate a takeover at $33 (£16.50) a share – $2 more than Microsoft offered in February – Yahoo! said the latest offer was too complex, risky and did not represent fair value.

In addition, Yahoo! chairman Roy Bostock said he was not prepared to see the business in the inexperienced hands of Mr Icahn’s proposed slate of directors.

Mr Bostock dubbed the joint bid, which came with a 24-hour deadline, “odd and opportunistic”.

“After negotiating among themselves without the involvement of Yahoo!, Carl Icahn and Microsoft presented us with a ‘take it or leave it’ proposal under which we would be required to restructure the company, hand over to Microsoft Yahoo!’s valuable search business and to Carl Icahn the rest of the company, giving us less than 24 hours to respond,” he explained.

“It is ludicrous to think that our board could accept such a proposal. While this type of erratic and unpredictable behaviour is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders.”