Yahoo Inc. on Monday rejected a $44.6 billion dollar buyout bid from Microsoft Corp., saying the offer was too low.
Yahoo said in a statement that its board unanimously rejected the bid from Microsoft, despite the fact that Microsoft's $31-a-share offer was a 62 percent premium compared to Yahoo's stock price.
Yahoo officials said the offer "substantially undervalues" its global brand, large worldwide audience, significant
recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as substantial unconsolidated investments.
The move sets the stage for struggle between Yahoo's board and shareholders, who may be skeptical that company should keep going it alone.
Some investors think Yahoo has stumbled as it failed to keep pace with Google in search and online advertising.
Microsoft now must decide whether to increase its offer, launch a proxy fight or simply withdraw.
Meanwhile, Yahoo is reaching out to other potential partners.
If completed, a merger of Microsoft and Yahoo would be the world's largest of two computer technology companies and would create a formidable rival to Internet search and advertising leader Google Inc.
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