Yahoo snubs Microsoft

Yahoo! has turned down Microsoft’s 22.4bn bid, saying it is “too low”. The bid valued Yahoo! at 62% more than its share price on January 31, the day the offer was made.

Yahoo! has turned down Microsoft’s £22.4bn bid, saying it is “too low”. The bid valued Yahoo! at 62% more than its share price on January 31, the day the offer was made.

The search engine is instead reported to be considering other options. It is thought to have restarted merger talks with AOL or even a possible tie-up with Google or Walt Disney. Google has a 5% stake in AOL.

Analysts have said that the deal with Google could go ahead if Yahoo! allows Google to handle searches on Yahoo’s site in exchange for a split for the advertising revenue. An option that several investors have called for as Google’s share of search continues to rise, while Yahoo’s slides.

Meanwhile no alternate bidders have emerged and analysts had been betting that the likeliest outcome was for Yahoo’s board to negotiate for a higher price from Microsoft. Some expect that this could force Microsoft to attempt a hostile take-over.

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