Yahoo Inc set to reject Microsoft's bid, says report
The company's board believes the software giant's offer, at $31 per share, "massively undervalues" Yahoo.Updated: Feb 10, 2008 08:55 IST
Yahoo's board has decided to reject Microsoft's unsolicited USD 44.6 billion bid to take over the Internet giant, the
Wall Street Journal
reported on Saturday, citing "a person familiar with the situation."
The company's board believes that Microsoft's offer, at USD 31 per share, "massively undervalues" Yahoo, and that it does not account for risks facing Yahoo if it pursues a deal that might be ultimately blocked by government regulators, it 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," the newspaper said on its internet site.
"Yahoo's board appears to be betting that Microsoft doesn't want to 'go hostile' and try to acquire the company against the wishes of management and the board," it said.
The Journal said that Yahoo will notify Microsoft on Monday of its decision.
On February 1 Microsoft unveiled its USD 44.6 billion offer to take over Yahoo, in an effort to merge the world's biggest software company with a major Internet player to take on search and advertising juggernaut Google.
Microsoft proposed USD 31 per share to Yahoo's board, a 62 per cent premium above its closing price the previous day.
Microsoft said a combination of the companies would lead to cost savings of USD 1.0 billion per year.
But on Wednesday Yahoo chief executive Jerry Yang sent a message to employees assuring them the firm's leaders are exploring ways to avoid a Microsoft takeover.