At 11 o’clock Saturday night, Yahoo heatedly rejected a “joint proposal” made by Microsoft and corporate raider Carl Icahn the night before that would give Microsoft Yahoo’s search business, oust the Yahoo board and current management and give Icahn control over what’s left.

In the statement Yahoo put out, chairman Roy Bostock said, “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. It is ludicrous to think that our board could accept such a proposal. While this type of erratic and unpredictable behavior 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.”

In response to the Microsoft/Icahn bid Yahoo said that it offered to sell Microsoft the whole company “for at least $33 per share.”

It said the transaction “could be negotiated and executed prior to August 1,” the date of the Yahoo stockholder’s meeting and the showdown with Icahn for control of the company.

Yahoo said it “also offered to negotiate an improved search-only transaction” but “Microsoft rejected both offers.”

Yahoo allowed that this time through Microsoft’s offer for its search operation was sweeter than the last time but that Microsoft and Icahn wouldn’t negotiate the “fundamental terms” of their proposal, a position consistent with Microsoft’s latest posture on Yahoo.

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