“The Yahoo board of directors has carefully reviewed Microsoft's unsolicited proposal with Yahoo's management team and financial and legal advisors and has unanimously concluded that the proposal is not in the best interests of Yahoo and our stockholders,” the company said 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,” it said.
The rejection had been largely expected by both the finance and technology community. But in dismissing Microsoft’s initial overtures, the carefully-worded Yahoo statement was in no way antagonistic toward a future, larger offer from Microsoft.
It did not cite anti-trust concerns, not allude to any misgivings about Microsoft’s intentions for the company and its technology.
“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 maximise value for all stockholders,” the Yahoo statement said.
Microsoft issued a statement describing the rejection as “unfortunate,” and left the door open to further pursuit of Yahoo, saying “moving forward to consummate the transaction” was best for all concerned.
“A Microsoft-Yahoo combination will create a more effective company that would provide greater value and service to our customers,” Microsoft said.
“Furthermore, the combination will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising.”
“The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.”
Reports from the US say one option that Yahoo is exploring is a possible merger with struggling internet firm AOL, a part of the Time Warner media behemoth.
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