Yahoo! Refuses To Bow Down To Microsoft's 3 Weeks Deadline Threat!

Yahoo! Inc. rejected software giant Microsoft's three week deadline to accept a $44.6 billion takeover bid, keeping the prospect of a higher bid wide open. Roy Bostock (chairman of Yahoo's board) said, "We continue to believe that your proposal is not in the best interests of Yahoo! and our stockholders."

Microsoft openly accused Yahoo! of avoiding serious negotiations over its unsolicited February 1 bid and warned that any further delay could result in a less attractive offer by Microsoft to Yahoo! In a letter to Yahoo!, Microsoft said, "We believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board ."

By combining with Yahoo! Microsoft hopes to overcome Google's dominance in the lucrative online advertising sector. The bid has come in lieu of Yahoo! Losing market share in online advertising leaving it vulnerable to the cash-rich Microsoft.

In a letter to Microsoft, Yahoo! Said, "We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis. We are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value."

According to Yahoo!, the company was worth at lest $40 a share, compared to the Microsoft's original offer of $31 a share. The higher quoted value could easily add around $10 billion to the cost of the deal to Microsoft.

In response, Microsoft said, "By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal "

Adding to this chaotic situation, Yahoo's shares tumbled 1.69% to $27.88. Whereas Microsoft's shares continued a steady climb of 0.96% to $29.44 in the early hours of trading on Monday morning.

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