SAN FRANCISCO (AFP) - Internet giant Yahoos board has decided to reject Microsofts 44.6 billion dollar takeover bid, an informed source told AFP Saturday.
The source confirmed an earlier Wall Street Journal report that Yahoos management believes the Microsoft offer, which would bring together two top names in online computing, massively undervalues Yahoo.
The Journal said Yahoos board also believes the Microsoft offer, at 31 dollars per share, does not account for risks facing Yahoo if it pursues a deal that might be ultimately blocked by government regulators.
"Yahoos board believes that Microsofts is trying to take advantage of the recent weakness in the companys share price to steal the company," the newspaper said on its website, citing an unnamed source.
"Yahoos board appears to be betting that Microsoft doesnt want to go hostile and try to acquire the company against the wishes of management and the board," it said.
A person knowledgeable with the situation told AFP that the Journal report was generally in line with the Yahoo boards intentions.
"Reports today lacked some facts, but they are not totally off-mark," the person said, requesting anonymity. "You can expect that Monday will be the day that the board responds."
On February 1 Microsoft unveiled its 44.6 billion dollar offer to take over Yahoo, in an effort to merge the worlds biggest software company with a major Internet player to take on search and advertising juggernaut Google.
Microsoft proposed 31 dollars per share to Yahoos board, a 62 percent premium above its closing price the previous day.
Microsoft said a combination of the companies would lead to cost savings of a billion dollars per year.
But Yahoo chief executive Jerry Yang sent a message to employees on Wednesday, assuring them the firms leaders were exploring ways to avoid a Microsoft takeover.
"Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape," Yang wrote in the email.
"Whats become clear in the past few days is how much people care about this company. Ive heard from many of you, and from other friends and colleagues from around Silicon Valley and across the globe, that we need to do whats best for Yahoo and our shareholders."
Google earlier condemned Microsofts effort as an attack on the very independence of the Internet.
"Microsofts hostile bid for Yahoo raises troubling questions," said David Drummond, Googles senior vice president for corporate development and chief legal officer, in a statement Sunday.
"This is about more than simply a financial transaction, one company taking over another. Its about preserving the underlying principles of the Internet: openness and innovation."
Analysts say the goal of the takeover is to better compete with Google, whose dominance of Internet advertising, backed by its powerful search engine technology, has come at both Microsofts and Yahoos expense.
Microsoft, they say, hopes that by taking over Yahoo it will expand its own presence in on-line advertising and, using Yahoos popularity and technology, ratchet up its own competitiveness overall in Internet services.
On Monday Microsoft urged Yahoo to quickly accept its offer.
"We think its a generous one," Microsoft chief executive Steve Ballmer said at the US firms annual conference with analysts in New York.
"We trust the Yahoo board and the Yahoo shareholders will join with us quickly in deciding to move down an integrated path," Ballmer said.
Also on Monday, there were unconfirmed reports that Googles chief executive had called Yang to offer to help the company resist any hostile takeover campaign by Microsoft.
Yahoo would not confirm that, but a source close to the company told AFP earlier this week that Yahoo has received calls from "a number of interested parties" and has a wide range of strategic options.
Those options could include outsourcing online advertising to Google itself.
If it spurns Microsofts offer, Yahoos board of directors will be under pressure to give stockholders a better return on their shares in line with the tempting 62-percent premium Microsoft offered.
No comments:
Post a Comment