by Brian Solis
As expected, Yahoo officially rejected Microsoft’s $45 billion “hostile takeover” (some read it as generous) today, citing that the company substantially undervalued the struggling online company.
According to the press release:
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.
Substantially undervalued is a strong choice of words, considering that the news of the possible acquisition sent Yahoo stocks soaring upwards of 60%. While the offer was originally generous at $31 per share, a source inside Yahoo said that the number needs to be in the $40s in order to start real dialog.
In an interesting twist however, the Times of London is reporting that Yahoo may be rekindling merger talks with AOL.
Microsoft is expected to submit a new offer.
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Discussion
Wow, this is really surprising. I’m actually really proud of Yahoo! with their bold decisions. Guess they won’t need this anymore: http://www.5min.com/Video/How-to-Negotiate—Tips-for-Yahoo-5794173