Feb 9, 2008 11:55 pm US/Eastern
Yahoo Said To Reject $44.6B Microsoft Bid
SAN FRANCISCO (AP) ―
Yahoo Inc.'s board plans to reject Microsoft Corp.'s bid to buy the Internet pioneer, The Wall Street Journal reported on its Web site Saturday.
Board members concluded the unsolicited $44.6 billion offer massively undervalues the Web giant, a person familiar with the situation told the newspaper.
The $31 per share bid was made public on Feb. 1. Board members so far would only say they were studying the offer.
Yahoo's board intends to send a letter to Microsoft on Monday explaining its decision, persons close to the company said.
Microsoft and Yahoo representatives did not immediately return calls for comment.
The slumping Internet company's rejection of the offer might mean they're getting ready for a long battle, analysts said.
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, reports the Wall Street Journal. But they're not ready to consider any offer below $40 per share, according to a person knowledgeable about the discussions.
Yahoo appears to be counting on Microsoft's reluctance to engage in a hostile takeover.
Ignoring the wishes of management and the board and creating resentment among the Web giant's engineers could also make it harder to push the deal past authorities, as Yahoo officials could try to convince regulators that the deal is anticompetitive.
But analysts are uncertain whether Microsoft would be up to paying the higher price per share, which would raise its bid by about $12 million.
(© 2008 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
