Microsoft Will Not Back-Off
Yahoo board has officially spurned Microsoft’s offer of $44.6 billion in cash and shares to take up the giant internet portal. In a letter to the software giant’s bid, Yahoo board has rejected the unsolicited bid for ender-valuation. According to Yahoo, Microsoft’s bid “substantially undervalues Yahoo including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earning potential, as well as our substantial unconsolidated investments.”
But Microsoft, looking to stop Google from dominating online advertisement market which is said to be worth $45 billions, has already hinted that it is not going to back off. Microsoft has described Yahoo’s response as “unfortunate” and said its own proposal was “full and fair”.
Yahoo is also looking for other options including rival bid to keep off Microsoft from taking over its boards. It has already explored tie-ups with Google for its advertising arm but nothing has come out of it as yet. Analysts believe that nobody is going to rival Microsoft’s bid as it can always outbid those. Also, Microsoft has not immediately raised its offer that stands at $29 per share now, down from initial bid of $31 due to loss of Microsoft’s stocks. In the absence of such offers, Yahoo might just have to try and gain some more values. On the other hand if Yahoo’s current board gets hostile, Microsoft might bypass it and can take the offer directly to shareholders to oust current directors who have until March 13 to nominate a new slate of directors.