NASDAQ: YHOO14.99   0 (0%)  

Yahoo’s board of directors on Monday (February 11, 2008) officially rejected Microsoft’s buyout offer. The board said that the 44.6-billion-dollar bid is too low and not what’s best for shareholders of a leading global Internet company. Yahoo! Board of Directors has carefully reviewed Microsoft’s unsolicited proposal and has unanimously concluded that the proposal is not in the best interests of Yahoo! and their stockholders.
After careful evaluation, the Board believes that Microsoft’s proposal substantially undervalues Yahoo! including Yahoo!’s global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as their substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and they remain committed to pursuing initiatives that maximize value for all stockholders.

On February 1, 2008, Microsoft unveiled what it called "a generous" offer to take over Yahoo. Microsoft has proposed an acquisition of Yahoo! for $31 per share or at apporximately $44.6 billon in cash and stock. Microsoft believes by acquiring Yahoo they can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.

Since the offer was made, Microsoft’s stock price has dropped to 28.21 dollars on Monday after news spread that the company might have to spend more to buy Yahoo. While Yahoo!’s stock price climbed up and closed up at 29.87 dollars on Monday.

According to Yahoo! Inc. Press Release, they said that the Board reviewed Microsoft’s proposal with Yahoo!’s management team and financial and legal advisors. Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to Yahoo!. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Yahoo!, and Munger Tolles & Olson LLP is acting as counsel to the outside directors of Yahoo!.