As expected, Yahoo has officially rejected Microsoft’s $44.6 billion bid to acquire the company. In a brief press release issued this morning, Yahoo writes
“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. 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.”
So, essentially Yahoo wants more money. But, let’s not forget that the public markets “substantially undervalued” Yahoo quite a bit more than Microsoft – shares were trading sub-$20 prior to the Microsoft bid (they are hovering around $29/share this morning).
As others have noted, this feels mostly like a negotiating tactic by Yahoo. They’ve bought more time to consider less likely alternatives such as a Google partnership or AOL merger, but in the end, it’s looking increasingly unlikely that there is another bidder that’s going to better Microsoft’s offer - other than Microsoft of course.
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