No deal, says Yahoo’s CEO, in response to a hostile $44.6 billion bid from Microsoft.
Jerry Yang and the Yahoo board sniffed at Microsoft’s offer, and decided they would pass on it. That has been reported widely since Friday, but only received formal confirmation today. From their statement:
Yahoo! Inc., a leading global Internet company, today said the Yahoo! Board of Directors has carefully reviewed Microsoft’s unsolicited proposal with Yahoo!’s management team and financial and legal advisors and has unanimously concluded that the proposal is not in the best interests of Yahoo! and our stockholders.
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.
62 percent premium for a stock that has languished under $20 per share? Nah, Yahoo’s management can do better than that. Bloomberg illustrated that line of thinking:
“Yahoo thinks they’re worth more because of the plans they’ve implemented that have yet to come to fruition,” said Daniel Taylor, an analyst at research firm Yankee Group in Boston. “The board is saying, ‘We think we can keep the company together and do far better with it than Microsoft ever will.’”
So nuts to you, Microsoft. Unless you want to bid $40 per share.
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