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$44.6 billion is "inadequate"

Microsoft was offering $31 a share. Yahoo's stock is said to be worth at least $35-36 a share, and maybe as much as $40.
 
webfusion said:
I have one question:

WTF?
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One way to look at it: my understanding is that Yahoo was valued considerably higher than the Microsoft offer as recently as November. The entire market has tanked since then, and prospects are bad overall, but Yahoo itself is a relatively volatile stock and can be expected to appreciate significantly once the market turns around. ... Or at least, that's the way many of the market pundits and the management of Yahoo seem to feel.

Basically, Microsoft is asking Yahoo management to "sell low, buy high" -- to sell at the trough. They rightly identified that as a bad move, financially. If they can hold out for another six months to a year, they're likely to be able to demand substantially more than $31 per share (the analysts estimate about 20% growth next year vs 16% across the sector, for example).
 
I don't think that Microsoft expected Yahoo's Board to accept their offer. I think, rather, that Microsoft is counting on panicked Yahoo shareholders to sell out. Given the recent hit that Yahoo stocks have taken, there will be a lot of individual shareholders who'll be happy to sell at this price. If Microsoft can get enough of those shares, they can use that position to oust the current board, and put in a new board that will accept their takeover offer.

Its a hostile takeover; this is just the opening volley in a lengthy battle.
 
Wolfman said:
I don't think that Microsoft expected Yahoo's Board to accept their offer. I think, rather, that Microsoft is counting on panicked Yahoo shareholders to sell out. Given the recent hit that Yahoo stocks have taken, there will be a lot of individual shareholders who'll be happy to sell at this price. If Microsoft can get enough of those shares, they can use that position to oust the current board, and put in a new board that will accept their takeover offer.

Its a hostile takeover; this is just the opening volley in a lengthy battle.
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If shareholders would be happy to sell at USD31, why not sell at current market price, which is higher.
There is certainly something I do not get..
 
Matteo Martini said:
If shareholders would be happy to sell at USD31, why not sell at current market price, which is higher.
There is certainly something I do not get..
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The current market price is just below USD 30. And the only reason it bounced up to there from below 20 a couple of weeks back was the offer from Microsoft.

It is not a surprise that Yahoo would reject the offer since the premium over the market price has shrunk to very little though, so in that sense you are correct.
 
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Matteo Martini said:
If shareholders would be happy to sell at USD31, why not sell at current market price, which is higher.
There is certainly something I do not get..
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Matteo,

You should read the article...to quote:
Investors appeared confident that Microsoft wants Yahoo badly enough to raise the stakes. Yahoo shares rose 25 cents to $29.45 in Monday's morning trading while Microsoft shares fell 48 cents to $28.08.
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Besides the issue of the share values, there is also a question of confidence in the current board. If shareholders believe that Microsoft would be better able to lead Yahoo than the current board, that is added incentive to sell.
 
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