Feeds

Yahoo! formally! rejects! Microsoft! offer!

Battle begins!

Bridging the IT gap between rising business demands and ageing tools

!!!!! Yahoo!'s board of directors has formally rejected Microsoft's hostile takeover bid at a meeting in New York.

A statement on the company's website said: "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."

The directors say they continue to evaluate strategic options to maximise value for shareholders. In other words, they are trying to smoke out a bigger bid. Yahoo! is casting around for a white knight and is said by The Times to be "seeking to restart merger talk with Yahoo!". According to the paper, previous talks failed over differences over price.

But how would a merger work? Times Warner, AOL's owner, would have to swap shares in AOL for shares in Yahoo! In turn it gets an even bigger headache. And Yahoo! shareholders get no payday. According to The Times, Yahoo! is also talking to Disney - an even less likely white knight. News Corp said last week it was not interested in bidding.

Since the bid was announced Microsoft's share price has fallen while Yahoo!'s has risen, effectively meaning that Yahoo! shareholders would get better value selling their shares on the open market rather than to Microsoft. But as the New York Times' Saul Hansell notes, Yahoo!'s stock price would "sink like a stone", if people actually thought it would retain independence.

So what will Microsoft do next? The company could always sit tight and wait - but it is likely to increase its offer and take that improved price directly to Yahoo! shareholders. If Yahoo! officers continues to reject Microsoft's advances, then Microsoft could wage a proxy war to oust the board in favour of people who will support the takeover.

Yahoo's full statement is here.®

Application security programs and practises

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.