Its official, Yahoo! has rejected Microsoft’s bid to acquire them for $44.6 billion. Yahoo! believed that the proposal which converts to about $31 per share undervalues the company’s global brand. In a letter filed with SEC, they wrote “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.”
So now it’s Microsoft’s turn to either raise their bid to over $40 per share (which would add another $12 billion to earlier bid) or go hostile by directly approaching the shareholders. In both the cases, Microsoft will have to deal with Department of Justice for possible antitrust issues.
In another related rumor, Times Online is reporting that Yahoo! has reinitiated the merger talks with AOL. Yahoo!’s future looks pretty interesting to me. Let’s just wait and watch how Microsoft responds to Yahoo!’s refusal.
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