( dpa )- Yahoo on Monday rejected a 44.6-billion- dollar takeover bid by Microsoft, arguing that it "substantially undervalues" the internet company and was not in the interests of its shareholders.
The merger would have been the largest technology takeover deal ever, and Microsoft now has the option to raise its offer or launch a hostile takeover bid.
Microsoft's original offer of 31 dollars per share represented a premium of 62 per cent over Yahoo's market valuation. The official rejection came amid company leaks that said Yahoo would not even start negotiating with Microsoft unless the bid was raised to at least 40 dollars per share, for a deal value of more than 50 billion dollars.
Yahoo made the decision to rebuff the offer at a special board meeting held Friday. The company said its board of directors was evaluating all of its future options, which media reports said could include a merger with internet service AOL.
"After a careful evaluation, the board has unanimously concluded that the proposal is not in the best interests of Yahoo and our stockholders," Yahoo founder and Chief Executive Officer Jerry Yang said in a company-wide email Monday.
"Of course, the board of directors is continuously 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 stockholders," he said.
The takeover offer came as Yahoo's slowing rate of growth drove the company's stock price down to five-year lows, and Yahoo last month said it was cutting some 1,000 jobs. But Yang said that the company's strategy to reverse the decline is set to kick into high gear.
"We are putting in place the pieces we need to accelerate growth by becoming a leading starting point for users and the must buy for advertisers," said Yang, citing among other factors, the company's global brand strength, its investment in new advertising technologies, and its leading position in mobile phone websites.