REDMOND, Wa. – Microsoft Corp. Chief Executive Steven Ballmer threatened Yahoo Inc. directors with a hostile takeover of the company if they don’t reverse course and agree to a deal within the next three weeks.

In a letter delivered on Saturday, Ballmer lamented Yahoo’s unwillingness to negotiate a deal, saying “that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!’s shareholders and employees,” The Wall Street Journal reported.

If a deal isn’t reached within three weeks, Microsoft would be “compelled” to take its offer directly to shareholders and wage a proxy fight to replace Yahoo’s directors, Ballmer wrote. He also implied that the offer Microsoft would make after the deadline would be lower than the one now on the table.

“If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal,” he wrote.

Yahoo’s board is reviewing the letter, a person close to the company said.

Microsoft offered to acquire Yahoo for $44.6 billion in cash and stock on Jan. 31. A couple of weeks later, Yahoo’s board rejected the offer, which is now valued at about $40 billion due to a substantial drop in Microsoft’s share price.

Ballmer’s letter, which comes after senior executives from the two companies failed to make any headway in two separate meetings in recent weeks, may make a friendly resolution of the stand off less likely. The sharply worded letter makes no secret of Microsoft’s frustration at the lack of progress and could end up alienating Yahoo’s board and management that already regard the software maker with a degree of suspicion.

In his letter, Ballmer suggests that worsening economic conditions have reduced Yahoo’s market value, adding that “by any fair measure, the large premium we offered in January is even more significant today.” Microsoft’s original $31 per share offer represented a 62 percent premium to where Yahoo’s shares had been trading before the offer.

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