Yahoo says Microsoft offer undervalues company

Yahoo rejected on Monday Microsoft's US$44.6 billion cash-and-stock offer on Monday, saying the unsolicited proposal substantially undervalues the company.

Confirming weekend rumors, Yahoo rejected on Monday Microsoft's US$44.6 billion cash-and-stock offer, saying the unsolicited proposal substantially undervalues the company.

In a statement, Yahoo said that its management team, along with financial and legal advisors, believe the offer doesn't reflect cash flow, earnings potential, or recent investments in its advertising platform.

Further, Yahoo said its board would continue to evaluate other "strategic options."

"We remain committed to pursuing initiatives that maximize value for all stockholders," the statement said.

Microsoft offered US$31 per share on Feb. 1, which was a 62 percent premium over Yahoo's closing price the day before, and was thus characterized at the time as the proverbial "can't refuse" type. However, since then, Yahoo's stock has risen in value and was trading just above US$29 on Monday morning.

At the same time, Microsoft's stock has fallen since it made the offer, closing at US$28.56 on Friday, down from a close of US$32.60 on the day prior to the offer. Microsoft offered to pay US$31 for half of Yahoo's outstanding shares and 0.9509 of a Microsoft share for the other half.

Yahoo's executives were rumored to have been searching for a buyer other than Microsoft. However, no buyer has emerged. Yahoo's latest moves mean that Microsoft may have make a more generous offer, or pursue a hostile takeover.

Microsoft said it believes the acquisition of Yahoo would give it the engineering talent and resources to compete better with Google. While Microsoft and Yahoo have had some success with display advertising, Google's has built a fortune on contextual text ads that appear during a search and on third-party Web sites.

With the offer, Microsoft acknowledged it believes that it and Yahoo can't make a credible run at Google unless they fuse into one organization.

However, skeptics doubt that jointly Microsoft and Yahoo will generate the magic potion that allows them to break Google's stranglehold on the search engine advertising market, the largest segment of the online ad market and the source of Google's riches. Far from making progress, Microsoft and Yahoo have seen their share of search engine queries shrink, as people's preference for Google expands.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?