Yahoo formally rejects Microsoft bid

Struggling web services giant Yahoo has formally rejected Microsoft's unsolicited $44.6 billion buyout bid, arguing the offer "substantially undervalues" its worth. Yahoo added it would leave the door open for future negotiations, stating in a release its 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." According to The Wall Street Journal, insiders say Microsoft may increase its offer, but short of a significantly greater bid--say, $40 per share, as opposed to the current $31 per-share--Yahoo directors would likely again leave the deal on the table, setting up a protracted struggle. Sources tell the Journal Microsoft will wish to avoid a proxy fight to push out Yahoo board members for fear key Yahoo employees would abandon ship.

For more on the Yahoo/Microsoft détente:
- read this Wall Street Journal article

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