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Rumor: Yahoo! to Reject Microsoft Bid
>> From yahoo.com:
[QUOTE]
In a bid to remain independent, Yahoo plans to reject Microsoft Corp.'s unsolicited takeover offer, according to reports on the Wall Street Journal's web site.
Quoting sources familiar with the situation, the Journal reports that Yahoo's board feels the offer of $31 per share "massively undervalues" the company. A letter spelling out the position is expected to be sent Monday. Yahoo also expressed concern that Microsoft's offer does not account for risks to Yahoo should the deal be overturned by regulators.
The Journal source said the company would be unwilling to consider an offer below $40 per share, which would represent a $12 billion increase over Microsoft's original $44.6 billion bid. It is unclear if Microsoft would be willing to increase its bid by such a significant amount.
Yahoo shares are currently 51 percent above their pre-bid value. In contrast, Microsoft shares have dropped about 13 percent since the bid was announced, far worse than the Standard & Poor's 500's loss of 4 percent.
Microsoft Chief Financial Officer Chris Liddell said the software company may issue some debt to finance the cash portion of its 50-50 stock and cash offer for Yahoo, instead of drawing down its entire $21 billion cash pile.
"It's likely we're actually going to borrow for the first time," said Liddell in an annual strategy meeting with analysts before Yahoo's apparent decision. "It's going to be a mixture of the cash we have on hand plus debt."
[/QUOTE]
Full Story: yahoo.com
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