International Law

Yahoo rejects Microsoft

From the Wall Street Journal:

Yahoo Inc.'s board plans to reject Microsoft Corp.'s unsolicited $44.6 billion offer to acquire the Web giant, a person familiar with the situation says.

After a series of meetings over the past week, Yahoo's board determined that the $31 per share offer "massively undervalues" Yahoo, the person said. It also doesn't account for the risks Yahoo would be taking by entering into an agreement that might be overturned by regulators. The board plans to send a letter to Microsoft Monday, spelling out its position.

Yahoo's board believes that Microsoft's is trying to take advantage of the recent weakness in the company's share price to "steal" the company. The decision to reject the offer signals that Yahoo's board is digging in its heels for what could be a long takeover battle. The company is unlikely to consider any offer below $40 per share, the person said.

It's unclear whether Microsoft would be willing to pay such a premium, which would increase the value of its original cash and stock bid by more than $12 billion. The rejection comes as Yahoo's board has been considering various other scenarios, including a search advertising partnership Google Inc. Yahoo's directors are still considering that and other options that would safeguard the company's independence, people close the company say.

Read more here.

Full post as published by Freedom to Differ on February 09, 2008 (boomark / email).