Yahoo Likely to Reject Microsoft Bid

February 10th, 2008 at 2:00 PM - News by Jeff Gamet

Internet search company Yahoo will likely reject Microsoftis unsolicited buy out offer on Monday. Yahoois rejection could see Microsoft sweetening its offer, or it could lead to a hostile takeover attempt, according to The Wall Street Journal.

Sources close to the matter claimed that Yahoois board felt that Microsoftis US$44.6 billion buyout offer undervalued the company. Apparently, the companyis board held a special meeting last Friday to discuss Microsoftis offer.

While a hostile takeover attempt is possible, Microsoft may be reluctant to pursue that avenue since it could cause key employees to leave. Microsoft is more likely to bump its offer up above its current $31 a share price point, but Yahoo is looking for at least $40 a share -- a number Microsoft may not be willing to meet because it would add an additional $12 billion to the deal.

Yahoo is expected to notify Microsoft of its decision by letter sometime on Monday.