10
February
Yahoo rejects Microsoft’s Bid
Yahoo Inc.’s board plans to reject Microsoft Corp.’s bid to buy the Internet pioneer, The Wall Street Jornal reported on its Web site Saturday.
Board members concluded the unsolicited $44.6 billion offer massively undervalues the Web pioneer, a person familiar with the situation told the newspaper.
Here’s Yahoo’s reason it rejected the offer:
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1. Yahoo thinks Microsoft is trying to take advantage of Yahoo’s weak stock price and is saying that Microsoft wants to “steal” the company.
2. Yahoo board member won’t consider offers below $40 a share, an extra $12 billion (quite the premium, considering the first offer was a 62% premium over Yahoo’s market value).
3. Yahoo is effectively stalling while it considers an alternative of partnering with Google (ironically, a point that nullifies the original point of Microsoft’s offer not taking into consideration “risks” of regulation, considering the risks of regulation are higher with Google).
4. Yahoo is hoping that Microsoft will not follow through with a hostile take over (even if Steve Ballmer said as much in his original letter). The reasoning here is that important engineers would not be willing to cooperate in a hostile take over, and regulators may be more easily convinced that this deal is anticompetitive if hostile.
The bid was made public Feb. 1.
