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.)

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

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

Linda Rosencrance

Computerworld
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?