By IANS
New York : Yahoo! Inc. Monday spurned Microsoft Corp.’s $44.6 billion takeover bid as too low.
Yahoo! said its board, that met Friday, had concluded Microsoft’s unsolicited offer “substantially undervalues” the Sunnyvale, California-based company. The rebuff was expected after news about it was leaked over the weekend.
Yahoo!’s stock price had dropped by more than 40 percent in the three months leading to Microsoft’s bid, which was valued at $31 per share when it was announced Feb 1. The offer represented 62 percent above Yahoo’s market value at the time.
Analysts believe that Microsoft will eventually sweeten the bid, raising the offered price to $35 or even $40 per share in an effort to negotiate an amicable deal.
The other, unsavoury option for Microsoft is to take its original bid directly to Yahoo!’s shareholders, a route that may entail toppling the 10-member board that rejected the original offer.
Microsoft did not immediately respond to Yahoo!’s rebuff. But shares of the company rose 62 cents, or 2 percent, to $29.82 in early trading Monday, while Microsoft shares lost 24 cents to $28.32.
Microsoft wants Yahoo! badly to take on Google’s supremacy in Internet search and advertising. Google, in turn, is feeling alarmed by the proposed merger of Microsoft and Yahoo! and has offered Yahoo! help in averting the takeover. Google has also raised the red flag of antitrust regulations in the US and Europe.