Microsoft Corp. finally made all those rumors about buying Yahoo a reality Friday, offering $44.6 billion for the search engine.
Microsoft said it will pay $31 a share for the company, a 62 percent premium over Thursdays closing price. It is the largest ever acquisition bid by Microsoft. The move was unsolicited by Microsoft.
Microsoft sent a letter Thursday to Yahoos board announcing its intentions. The two sides had talked about a deal about a year ago, but Yahoo would reject the notion. Microsoft CEO Steve Ballmer said Friday the company may not take no for an answer this time around.
Yahoos shares jumped nearly 46 percent to $27.88 by mid-morning Friday. The companies stock had been off almost the same amount since reaching a 52-week high of $34.04 in October.
Yahoo is one of the biggest Internet companies but is failing to keep up with industry giant Google. A deal of this magnitude could help Microsoft and Yahoo close the gap.
Ballmer noted in the letter to Yahoo that the competitive situation has not improved since last years talks.
If the takeover succeeds, Microsoft and Yahoo would be able to claim about 33 percent of the U.S. search market.