Yahoo: Just Say No
Just say no to Microsoft, little Yahoo. Just say no. That was the grand decision reached at Yahoo’s board meeting Friday. Seems the board feels Microsoft’s $31-per-share hostile offer “massively undervalues” Yahoo. It officially rejected the bid this morning.
“Yahoo Inc., a leading global Internet company, today said the Yahoo Board of Directors has carefully reviewed Microsoft’s unsolicited proposal with Yahoo’s management team and financial and legal advisers and has unanimously concluded that the proposal is not in the best interests of Yahoo and our stockholders,” Yahoo’s board explained in a statement. “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 Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.”
So what does the Web’s perennial underachiever believe itself to be worth? $40 a share. At least. Which is amusing considering that Yahoo’s own shareholders valued it at less than half that on the day before Microsoft’s bid was announced.
The question, then, is this: Is Microsoft willing to raise its offer? Yusuf Mehdi, Microsoft’s senior vice president of strategic partnerships, told Advertising Age it is.
Ad Age: If Yahoo comes back and says this isn’t enough money, would you borrow money or partner to make it happen?
Mr. Mehdi: Without a question, we are very committed to this combination. … We have a whole set of plans and preparations ready to go to make it work. And we’d like to do that in a cooperative way with Yahoo. No question–our commitment is clear with this one.”