It is official now…Yahoo has rejected Microsoft’s offer. Alas a sigh of relief for Google.The reason – Yahoo finds it too low. As I’ve already mentioned in my previous post, Yahoo was offered $44.6bn (£22.4bn) in cash and shares by the software giant Microsoft to compete with Google. The offer was actually 62% above the level at which Yahoo stocks were trading when it was made on 1 February. But somehow Yahoo’s shares closed on Friday at $29.20. So, it was very much sure that the offer was going to be rejected.
Yahoo said the offer “substantially undervalues” the company and is not in shareholders’ interests.
A source quoted by the Wall Street Journal said that Yahoo’s board would be unlikely to consider anything below $40 per share which would be a 109% premium to the $19.18 closing price of Yahoo’s shares the day before the original offer was announced.
Also the thing to keep in mind is that Yahoo’s shares have not traded above $40 for two years.
Let’s see what Microsoft’s next move is going to be.
