Yahoo said Monday its board of directors has rejected Microsoft's 44.6-billion-U.S.-dollar unsolicited bid to buy the company, arguing the offer "substantially undervalues" the Internet giant's worth.
"The proposal is not in the best interests of Yahoo and our stockholders," the Silicon Valley search engine giant said in a statement.
Yahoo said it would continually evaluate all of its strategic options in the context of the rapidly evolving industry environment and remain committed to pursuing initiatives that maximize value for all stockholders.
However, some industry analysts said Microsoft may come back up with a better offer following numerous reports that Yahoo has turned down the buyout offer from the software giant.
Microsoft has not yet made a response to Yahoo's rejection of its offer. Analysts said Microsoft could choose to go hostile by issuing a tender offer to Yahoo shareholders or by mounting a proxy battle to nominate its own directors to replace the board at Yahoo.
The software giant announced its buyout offer on Feb. 1, days after Yahoo's stock price slipped to a new low in several years.
Reports said Yahoo's board of directors discussed the Microsoft bid on Friday as well as other potential options for the troubled company. Among those options is a potential cooperation deal with Google.
Microsoft's effort to buy Yahoo is seen widely as the software giant's latest attempt to challenge Google's dominance of the lucrative on-line search and advertising markets.
Google has been gaining ground on Yahoo, which is also under pressure from the increasing popularity of social networking websites like Myspace and Facebook.
Microsoft to persist with takeover bid despite Yahoo's refusal
Microsoft said Monday that it would continue its efforts to take over Internet search engine and web portal giant Yahoo although its former acquisition offer was turned down.
The software giant didn't say what steps it would take, but called its former offer price "full and fair."
"It is unfortunate that Yahoo has not embraced our full and fair proposal to combine our companies," said a Microsoft statement. "Based on conversations with shareholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties."
Yahoo announced earlier in the day that its board of directors has decided to reject Microsoft's 44.6-billion-dollar bid, arguing the offer "substantially undervalues" the Internet giant's worth.
Microsoft's proposal is "not in the best interests of Yahoo and our stockholders," said the company's board of directors in a statement.
Microsoft said investors, consumers and advertisers would benefit from the two companies' combination, which would create a more formidable competitor to Google in the Internet search and online advertising markets.
It is not clear whether Microsoft would raise its offer price. Industry analysts said Microsoft could either raise its offer or take the original offer directly to Yahoo's shareholders.
Microsoft's effort to buy Yahoo is seen widely as the software giant's latest attempt to challenge Google's dominance of the lucrative online search and advertising markets. The deal would be the largest in Microsoft's 33-year history.
Having been overtaken by Google as the No. 1 search engine, Yahoo is also under pressure from the increasing popularity of social networking websites such as Myspace and Facebook.
(Xinhua News Agency February 12, 2008)