The Yahoo board has mulled it over, and its answer for Microsoft is a simple “no.” The “hostile” $44.6 billion bid was rejected by the board, as largely expected. The question now is, why?
Reported first this morning by the Wall Street Journal, a person “familiar” with the situation says that Yahoo believed the offer of $31 a share “massively undervalues” the company and provides no protections for the risks Yahoo would incur by entering into a deal that would be heavily vetted and possibly overturned by regulators. According to the WSJ’s source, Yahoo is looking for bids north of $40 per share, or something in the $56+ billion range. At $31 per share, the board apparently feels as though Microsoft is trying to “steal” the company and take advantage of recent weaknesses. Such “weaknesses” aren’t necessarily recent, however. Yahoo’s stock price hasn’t been north of $40 since the end of 2005.