Yahoo’s board of directors plans to reject Microsoft’s unsolicited US$44.6 billion takeover bid, The Wall Street Journal reported Saturday, citing as its source “a person familiar with the situation.”
According to the report, the source said the Yahoo board has determined that the US$31-per-share offer “massively undervalues” the online services company. In addition, Microsoft’s buyout bid doesn’t take into consideration the business risks that Yahoo would be taking if it entered into an agreement that in the end might not be approved by government regulators, the source told the Journal.
According to the Journal, Yahoo’s board intends to send Microsoft a letter on Monday, detailing its position.
A Yahoo spokeswoman declined to comment on the report. “We are not providing details on the board’s review process,” she wrote. “Yahoo’s board is carefully and thoroughly evaluating the Microsoft proposal in the context of all of the company’s strategic alternatives, and will pursue the best course of action to maximize long-term value for shareholders.”
Microsoft, which announced its offer for Yahoo on Feb. 1, couldn’t be reached for comment. The offer is a combined cash-and-stock deal; in announcing the bid, Microsoft said Yahoo shareholders could choose to receive either cash or Microsoft stock, although it added that the total consideration would be equally split between the two forms of payment.
Yahoo is still evaluating other options, including a search advertising partnership with Google Inc., according to today’s report by the Journal. It also may still be open to a longer negotiation with Microsoft: The Journal said it was told by the source that Yahoo would be unlikely to consider any offers below US$40 per share.