Yahoo turns down Microsoft offer

Yahoo has formally declined Microsoft's initial acquisition offer made on 1 February.

The company did not entirely rule out a sale to Microsoft, but insisted that the $44bn offer "substantially undervalues" Yahoo as a whole.

"The Yahoo board 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," the company said in a statement released yesterday.

The response comes 10 days after Microsoft shocked the industry by publicly announcing its offer to acquire the ailing web giant.

Prior to the offer, Yahoo had been focused on consolidating its business and recasting itself as a new class of web portal.

The news set off a storm of speculation. Along with the Microsoft proposal, analysts speculated that Yahoo may sell its advertising business to Google or look to a merger with AOL.

Yahoo pointed out that it was not entirely ruling out a deal with Microsoft or any of the other possible suitors which have emerged.

The board of directors said that it will continue "evaluating all strategic options in the context of the rapidly evolving industry environment".

Microsoft stands behind Yahoo bid

Redmond maintains $44bn price tag is 'full and fair'  12 Feb 2008

Yahoo to take hard look at Microsoft bid

Board to 'evaluate proposal carefully'  04 Feb 2008

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