Yahoo rejects Microsoft's $44.6B bid
Microsoft withdraws proposal to acquire Yahoo
Yahoo's board of directors has rejected Microsoft's unsolicited proposal, claiming that it undervalues Yahoo's business.
Microsoft sent an open letter to Yahoo's board last month offering to buy out shareholders in a $44.6 billion bid. The offer came after Yahoo reported losses in earnings. Many analysts applauded a potential deal, claiming that a joined Microsoft and Yahoo would take on Internet giant Google in search marketing inventory and display ads.
However, others expected a rejection. Michael Gartenberg, analyst at JupiterResearch, said last week, "Yahoo will probably not take the first bid, and may play the offers out. Still, Microsoft may be the only company big enough to make such an offer."
Yahoo representatives were not available for comment, but the firm released a press statement claiming that this decision to deny Microsoft's offer was not enough considering "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."
Executives at Microsoft were not available for comment.
According to the release, Yahoo's board of directors is "continually evaluating all of its strategic options," which may mean that they are still open to being bought.
Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to Yahoo. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor and Munger Tolles & Olson LLP is acting as counsel to the outside directors of Yahoo.