Yahoo Inc turns down Microsoft offer

Yahoo's board of directors say the $44.6 billion bid "substantially undervalues" the veteran company.

Yahoo's board of directors on Monday rejected Microsoft's buyout offer, saying the 44.6-billion-dollar deal "substantially undervalues" the veteran Internet company.

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"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," Yahoo said in a statement.

On February 1, Microsoft unveiled what it called "a generous" 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 31 dollars per share to Yahoo's board, a 62 per cent premium above its closing price the previous day.