Microsoft unfazed by Yahoo's rejection of takeover bid

"It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies", writes Microsoft in a response to the Yahoo supervisory board's announcement yesterday that it was rejecting Redmond's takeover bid. Microsoft says it is keeping all of its options open to ensure that Yahoo shareholders can take advantage of the value in this takeover bid. The software firm adds that Yahoo's response does not change its faith in the strategic and financial advantages of the bid.

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Microsoft does not say what these other options might be. The firm might raise its bid or launch a hostile takeover. In return, Yahoo could defend itself with a "poison pill": a strategic move to make the takeover less attractive, if not completely impossible. Analysts assume that negotiations between the two companies will be long.

At the beginning of the month, Microsoft announced its official takeover bid for Yahoo. The firm offered $31 per share, putting the total cost for the takeover of Yahoo at $44.6bn. For Yahoo's board of directors, the offer was not high enough. Yahoo announced that the bid clearly undervalued the company, its brand, worldwide visitors, and recent investments in ad platforms. According to media reports, Yahoo wants at least $40 per share.

(jbe)