Yahoo Refuses Microsoft's $44.6 Bln Offer

February 11, 2008 | by Christopher Nickson

Reports are that Yahoo's board will turn down the takeover offer from Microsoft as Yahoo share prices rise.

Last week, you might recall, Microsoft put in a $44.6 billion bid for Yahoo, stirring up fathers all through the computing and business worlds. That left the ball firmly in Yahoo’s court, and now, it appears, they’ve come up with a reply.
 
According to a number of news agencies and newspapers, Yahoo’s is set to say no to the offer.
 
Microsoft has offered $31 a share, although that was far higher than the trading prices of Yahoo’s shares. But the speculation is that Yahoo is unlikely to consider any offer that’s under $40 a share, the Wall Street Journal has reported – a figure it hasn’t reached for two years.
 
As a result of the offer, Yahoo’s shares have risen, closing at $29.90 on Friday, while, conversely, Microsoft’s have fallen by 12%. That would seem to indicate that people think it’s either too big a move for the Redmond giant, or one that would take them away from the true focus of their business. Certainly, the knock-on effect is to lower Microsoft’s offer in real terms, to a paltry $41.8 billion.
 

[Update; It's official, Yahoo has formally rejected Microsoft's unsolicited merger proposal, finding it "substantially undervalues" Yahoo and its brand. Yahoo's board did not elaborate how the company's management plans to turn the company around; Yahoo has been working a restructuring plan for the last 18 months which has yet to yield significant results.

Some industry watchers believe Microsoft will raise its bid for Yahoo, possibly taking its proposal directly to shareholders for a vote rather than putting the idea in front of Yahoo's board. Other sources have Yahoo renewing talks with AOL, potentially giving Yahoo a cash infusion while significantly expanding the audience for AOL's online advertising efforts. —-Geoff Duncan]

Post Your Comment...Comments

BILL on Feb 11th, 2008 at 6:06 AM:

Google is the driving force behind the acquisition. But an index of joint Yahoo/Microsoft assets does not gurantee their ability to overtake the search giant. Both companies are trailing because of poor product portfolios, poor monetization, and a failure to innovate. The combined company may create a more assertive "also ran" player in the industry, but that player is not much more likely to beat Google.

Read the analysis of what Yahoo's new advertising platform would have to be at http://www.broodingsavage.com/journal/2008/2/11/wh...

RX8 on Feb 11th, 2008 at 10:46 AM:

Good for Yahoo!

Microsoft would just ruin the company anyways. However, knowing how Ballmer acts, he will probably pay the premium price just to get them. Once he sets his mind on something, it's hard for him to turn around.

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