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Microsoft to press bid for Yahoo despite rejection

Business Materials 12 February 2008 08:19 (UTC +04:00)

( dpa )- Microsoft Corp has pledged to press on with its takeover bid for Yahoo Inc, calling Yahoo's rejection of the 44.6-billion-dollar offer "unfortunate" but not signaling what steps it would take to implement the deal.

In a statement Monday, the world's largest software company said it would "pursue all necessary steps" to get the proposal in front of Yahoo shareholders and "consummate a transaction."

"We are offering shareholders superior value and the opportunity to participate in the upside of the combined company," Microsoft said. "The combination offers an exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market."

Microsoft declined to state whether it would change the financial terms of its bid, which calls for Yahoo shareholders to get 31 dollars per share, half in stock and half in cash.

Earlier Monday, Yahoo rejected Microsoft's takeover bid, arguing that it "substantially undervalues" the internet company and was not in the interests of its shareholders.

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, which would push the value of the deal to more than 50 billion dollars.

Yahoo made the decision to rebuff the offer at a board meeting 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 provider 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 companywide e-mail 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 has driven the company's stock price down to five-year lows and Yahoo last month said it was cutting about 1,000 jobs, but Yang said 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.

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