Yahoo! Inc. has officially rejected Microsoft Corp.s unsolicited $44.6 billion offer to purchase the Internet company.
The Yahoo! board made the announcement Monday morning, saying that the offer undervalues the company. The move had been widely expected since Microsofts surprise announcement on Jan. 31, and word of the boards rejection began surfacing over the weekend.
After careful evaluation, the Board believes that Microsoft’s proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments, Yahoo! said in a statement. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.
Microsoft had offered Yahoo! $31 a share, which was a 60 percent premium at the time. It would be Microsofts largest purchase ever.
Yahoo! has been struggling in its competition with Internet giant Google Inc., and the companys shares had fallen almost 60 percent since a 52-week high of $34.04 in October.
This is the second time in about a year Yahoo! has rejected Microsoft. When Microsoft CEO Steve Ballmer announced the current plan, he indicated the company wouldnt take no for an answer this time around.
It has been reported that Yahoos shareholders are growing impatient and want the company to seriously consider offers that may help stop the bleeding. Some analysts believe Microsoft may try to go directly to the shareholders with the offer or raise its asking price.
The potential Microsoft-Yahoo! deal also has faced significant competition criticism, including Google voicing concern.
Yahoo!s stock was up a slight 19 cents to $29.39 mid-morning Monday.