Yahoo Rejects Microsoft’s Attempted Takeover Bid

Yahoo’s board unanimously decided to spurn Microsoft after concluding the offer as expected, worth $44.6 billion or $31 per share — “substantially undervalues” one of the Internet’s prized franchises. The cash-and stock deal is now valued at about $40 billion, or $28.91 per share, which a reflects a drop in Microsoft’s market value.

But Yahoo didn’t raise antitrust concerns about the proposed deal and added language that seemed to invite a higher offer from Microsoft, the world’s largest software maker. Analysts are convinced Microsoft will raise its bid because it needs Yahoo to close Google’s widening lead in the lucrative online search and advertising markets that are rapidly reshaping the technology and media industries.Meanwhile, Yahoo finds itself in a bind because its stock was near a four-year low before the Microsoft bid surfaced and its management already has said things are unlikely to get significantly better until 2009.

Just two days before Microsoft made its bid, Yang warned Yahoo faced “headwinds” in 2008 and laid out plans to eliminate 1,000 jobs, or about 7 percent of the company’s work force, to boost profits.

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