Yahoo Tells Microsoft: ‘On Yer Bike!’ February 12, 2008

Read more Gizmodo UK , Online , Software , Technology

As predicted, Yahoo has turned down Microsoft’s takeover offer of $45bn, or $31 per share.

This doesn’t mean the deal’s off, just that Microsoft will have to dig a bit deeper into its coffers. If previous reports continue to be correct then it may have to dig to the tune of $40 per share, or $12bn extra, to secure the ailing online company. Here’s the official statement:

“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.”

Microsoft’s official response went like this:

"It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties."

It is expected that Microsoft will raise its offer but by no means certain that Yahoo will get $40 per share.

Fresh reports this morning claim that Yahoo is planning to reopen merger talks with AOL too, probably to help Microsoft dig deeper faster.-Martin Lynch

microsoft yahoo google