Yahoo's board set to rebuff Microsoft
Reportedly, the slumping Internet takeover target has decided that the offer of $44.6 billion is too low.
SAN FRANCISCO - Yahoo Inc.'s board will reject Microsoft Corp.'s unsolicited takeover bid after concluding the $44.6 billion offer undervalues the slumping Internet pioneer, according to a person familiar with the situation.
The decision could provoke a showdown between two of the world's most prominent technology companies.
If the world's largest software maker wants Yahoo badly enough, Microsoft could try to override the board by taking its offer - originally valued at $31 per share - directly to the shareholders. That risky route probably would force Microsoft to try to oust Yahoo's 10-member board.
Alternatively, Microsoft could sweeten its bid. Many analysts say Microsoft is prepared to offer as much as $35 per share for Yahoo, which boasts one of the Internet's largest audiences and most powerful advertising vehicles despite a prolonged slump that has hammered its stock. Yahoo shares ended the week at $29.20.
Yahoo's board reached its decision after exploring a wide variety of alternatives in the last week, according to the source, who did not want to be identified because the reasons for Yahoo's rebuff won't be officially spelled out until tomorrow morning.
Microsoft and Yahoo declined to comment yesterday on the decision, first reported on the Wall Street Journal's Web site.