Yahoo Rejecting MS Bid

Yahoo has rejected Microsoft's $44.6 billion takeover bid, says a Wall Street Journal source allegedly close to the deal. After a last-minute meeting yesterday, Yahoo's board is said to have rebuffed the offer from Microsoft believing that the Windows developer is acting out of opportunism. The buyout offer was an attempt to prey on Yahoo at a weak point in its history, the rumored insider says. Although the offer of $31 per share is significantly higher than Yahoo's stock value at the time of the proposal, the search engine firm's executives reportedly believe that this offer is undervalued and are waiting for a bid of $40 per share or more, which could raise the worth of the bid to $56 billion.

As a result of the decision, Yahoo may still be willing to consider a Google alliance or a similar deal to sour the prospects for Microsoft. Yahoo may alternately be placing a calculated bet that Microsoft would be unwilling to generate the ill will that would likely stem from a genuinely hostile takeover, the newspaper notes, as many employees may openly resist a forced buyout.

Microsoft had initially tried to position its bid as a mutually beneficial deal that was the culmination of months of "off and on" negotiaton, claiming that both it and Yahoo would need to merge to provide a major alternative to Google. However, Yahoo's initial response and later investigation revealed that Microsoft was ultimately fulfilling an ultimatum that threatened Yahoo with a public declaration of the bid if the latter company did not agree to a deal in private.

By Electronista Staff