Report: Yahoo plans to reject Microsoft's US$44.6B buyout bid

Board thinks current offer undervalues online services company, Journal reports

Yahoo's board of directors plans to reject Microsoft's unsolicited $US44.6 billion takeover bid, The Wall Street Journal reported Saturday, citing as its source "a person familiar with the situation."

According to the report, the source said the Yahoo board has determined that the $31-per-share offer "massively undervalues" the online services company. In addition, Microsoft's buyout bid doesn't take into consideration the business risks that Yahoo would be taking if it entered into an agreement that in the end might not be approved by government regulators, the source told the Journal.

According to the Journal, Yahoo's board intends to send Microsoft a letter on Monday, detailing its position.

A Yahoo spokeswoman declined to comment on the report today. "We are not providing details on the board's review process," she wrote. "Yahoo's board is carefully and thoroughly evaluating the Microsoft proposal in the context of all of the company's strategic alternatives, and will pursue the best course of action to maximize long-term value for shareholders."

Microsoft, which announced its offer for Yahoo on Feb. 1, couldn't be reached for comment today. The offer is a combined cash-and-stock deal; in announcing the bid, Microsoft said Yahoo shareholders could choose to receive either cash or Microsoft stock, although it added that the total consideration would be equally split between the two forms of payment.

Yesterday, published reports said that Yahoo's board was meeting to discuss the offer.

Yahoo is still evaluating other options, including a search advertising partnership with Google Inc., according to today's report by the Journal. It also may still be open to a longer negotiation with Microsoft: The Journal said it was told by the source that Yahoo would be unlikely to consider any offers below $40 per share.

If so, that would require Microsoft to raise its original offer by at least 29 per cent, or about $13 billion. In other words, the cost for Microsoft to become a more credible rival to Google in the search and online advertising markets could start at about $57.6 billion.

Google has been doing what it can to scuttle the Microsoft takeover bid, including playing the antitrust card by asking, in a blog post by one of its executives last Monday, whether Microsoft might "attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?"

Microsoft quickly shot back, issuing a statement saying that a combination of it and Yahoo merger would "create a more competitive marketplace."

(Eric Lai contributed to this story.)

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Linda Rosencrance

Computerworld

Comments

Comments are now closed.

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?