Yahoo officially rejected Microsoft's unsolicited bid for the internet company yesterday, saying it substantially undervalued the business.
Microsoft had no immediate response to the Silicon Valley company's position but is expected to emphasise it could take its offer, worth $29.08 a share or $41.8 billion in all, directly to Yahoo shareholders and turn it into a hostile one.
Yahoo issued a statement rather than sending a reply to the January 31st letter from Steve Ballmer, Microsoft chief executive, in which he made the takeover proposal.
It said its board had carefully reviewed it with the management team and financial and legal advisers "and had unanimously concluded that the proposal is not in the best interests of Yahoo and our stockholders".
The board believed the 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".
Yahoo could consider a partnership with Google, the sale of its investments in China and Japan or another offer for the company.
However, no other bidders have emerged.
In an e-mail to employees, Jerry Yang, chief executive, said Yahoo had put in place strategies to increase market share in online advertising and create value for shareholders.
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