Yahoo officially rejected Microsoftis unsolicited buyout offer on Monday. The Internet search company turned down the US$44.6 billion offer stating that Microsoft undervalued it, and that it was acting in its shareholderis best interests.
Yahoois Board of Directors unanimously rejected the take over bid and added "After careful evaluation, the Board believes that Microsoftis 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."
Microsoft presented Yahoo with a combined cash and stock buyout offer after the company reported a 23 percent drop in earnings and said that it was planning to cut 1,000 jobs in February. The Redmond-based company hoped to leverage Yahoo to gain a larger slice of the online advertising market and to better compete with Google.
While Yahoo rejected Microsoftis offer, that doesnit necesarily mean the proposed buyout is dead in the water. Microsoft could counter with a new offer, or attempt a hostile takeover.
So far, Microsoft has not responded to Yahoois rejection.