Yahoo explains why it sees Microsoft takeover bid as too low

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Sunnyvale, Calif.—Yahoo on Wednesday released an investor presentation detailing strategic initiatives that are expected to roughly double operating cash flow over the next three years to $3.7 billion, from $1.9 billion. The presentation supports the unanimous determination by Yahoo’s board of directors that Microsoft Corp.’s unsolicited buyout offer substantially undervalues Yahoo.

The plan was first presented to Yahoo’s board in December. Microsoft made its bid on Jan. 31.

In rejecting the offer, Yahoo’s board cited the company’s global brand, large worldwide audience, significant recent investments in advertising platforms, future growth prospects and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision. Yahoo’s board said it is continuing to evaluate all its strategic alternatives to a Microsoft takeover.

“This is a scale business, and our scale is a tremendous strategic asset,” said Roy Bostock, chairman of Yahoo, in a statement.

“We are pleased to share with the market more details about our business and our expectations for Yahoo’s financial performance, which provided context for our board’s unanimous rejection of Microsoft’s unsolicited proposal.”

—Carol Krol

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