SAN FRANCISCO - Yahoo's board of directors on Monday rejected Microsoft's buyout offer, saying the 44.6-billion-dollar bid is too low and not what's best for shareholders of the veteran Internet company.
A Yahoo! billboard is seen in San Francisco, California. Yahoo's board of directors on Monday rejected Microsoft's buyout offer, saying the 44.6-billion-dollar bid is too low and not in the interest of shareholders of the veteran Internet company. [Agencies]
Hours later, Microsoft urged Yahoo to reconsider its blockbuster bid to combine the two tech titans and said it offers "superior value" to Yahoo shareholders.
Yahoo issued a statement early in the day saying its board had decided "after careful evaluation" that Microsoft's bid "substantially undervalues Yahoo."
As a result, the board "concluded that the proposal is not in the best interests of Yahoo and our stockholders," Yahoo said.
Microsoft called the Yahoo board action "unfortunate" and said the bid was "full and fair."
"As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal," the software titan said.
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, a 62 percent premium above Yahoo's closing price a day earlier.
Yahoo's share price climbed in the wake of the offer, and closed up over two percent at 29.87 dollars Monday before Microsoft reiterated its offer.
Microsoft's stock price has slipped since the offer was made, and dropped just over one percent to 28.21 dollars Monday after news spread that the company might have to spend more to buy Yahoo.
Some analysts said the wording of the statement by Yahoo suggests that the company is holding out for a better price, and guarding against potential lawsuits from stockholders.
"Right now they are haggling," Silicon Valley analyst Rob Enderle told AFP. "Yahoo is not saying no at any price. They are saying the Microsoft offer is not strong enough."
It is common for companies to rebuff initial buyout offers and hold out for sweeter deals.
A hostile bid by Microsoft to take over Yahoo would involve the US software giant making offers directly to stockholders and maneuvering to replace Yahoo's board members at an upcoming March election.