Yahoo! rejects Microsoft bid

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by Stephen Withers

Tuesday, 12 February 2008

! Yahoo!'s board of directors has given the thumbs down to Microsoft's unsolicited bid for the company. Related stories Review: Too Human Yahoo!'s Zimbra spiffs up iPhone support Microsoft investment shows all is not well at Novell Microsoft IE8 Beta 2 released: the web browser for jerk-offs? It’s the end for the “Frickin’ Laser” Microsoft had offered $US31 for each Yahoo! share, payable in cash or Microsoft stock at the shareholder's option, subject to an overall balance of 50 percent cash and 50 percent stock. The offer valued Yahoo! at $US44.6 billion, a 62 percent premium on Yahoo!'s closing price the day before the offer was made. But the Yahoo! board has unanimously decided the bid is not in the best interests of Yahoo! and its stockholders. "After careful evaluation, the Board believes that Microsoft's proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments," company officials said in a brief statement. "The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders." The announcement follows rumours that Yahoo! was looking for a higher bid, whether from Microsoft or another potential purchaser. Like many companies, Yahoo's share price had been drifting downwards during the last three months. THe bid from Microsoft restored it to levels not seen since early November 2007. At the time of writing it was trading around $US29.80, 2 percent up from the previous closing price of $US29.92. Microsoft's share price continued its downward trend since announcing its bid for Yahoo!, with a further drop following Yahoo!'s rejection. It has regained some ground during today's trading, and is currently at $US28.16, 1.4 percent down on the previous close. Please enable JavaScript in your browser to post your comment! Tags See All Tags Mergers Acquisitions  Microsoft  Stephen Withers  Yahoo!  Get stories like this delivered daily - FREE - subscribe now

 

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