Blog Post

Yahoo Officially Rejects Microsoft Bid: ‘Not In Best Interests’: Yang Explains To Yahoos

Yahoo’s (NSDQ: YHOO) statement: “Yahoo! Inc. (Nasdaq:YHOO – News), a leading global Internet company, today said the Yahoo! Board of Directors has carefully reviewed Microsoft’s (NSDQ: MSFT) 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.

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.”

For the record: Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to YahooSkadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor; Munger Tolles & Olson LLP is acting as counsel to the outside directors of Yahoo.

Update: CEO Jerry Yang explained the board’s decision in an email to Yahoos this morning that also was filed with the SEC. We’ve posted the full text here. It’s a combo justification for a higher price/rah-rah for the troops/explanation of why Yahoos won’t be seeing that stock premium anytime soon.

4 Responses to “Yahoo Officially Rejects Microsoft Bid: ‘Not In Best Interests’: Yang Explains To Yahoos”

  1. Yahoo CEO and co-founder Yang has taken steps to try to keep the company independent, including considering an alternate tie-up in which Google would handle its search operations.

    The company may also make a new approach to Time Warner Inc's AOL Internet division, the Times of London said on Monday. Time Warner declined comment on the report.

  2. Vijay Kumar mandava

    As everyone expected Yahho! did it saying that the offer significatly undervalues the company. As of now, there is no other bidder in the race for Yahoo! even though it has rejectd the 62% premium bid. That shows the confidence of Yahoo! over its strenthes. Definitly, Microsoft will increase its offer price, as it desperately need Yahoo! to compete with Google.

    There are several news that Google will make alliances with Yahoo! to stop the takeover and Yahoo!'s merger consideratin with AOL. But I think Microsoft already committed to acquire Yahoo!, so definitely it will fight until it gets Yahoo! For the purpose Microsoft is seeking first ever debt. This shows Microsoft is evaluating all options to takeover Yahoo!

    Only one can stop Microsoft's takeover that is Anti-trust regulator.