NEW YORK Yahoo!'s board of directors has decided to spurn Microsoft's $44.6 billion offer for the company.
In a letter released this morning, the board said the $31-per-share unsolicited offer "massively undervalues" the company. It said the decision was unanimous.
The decision sets up a drawn-out fight over Yahoo!'s future. Analysts expect Microsoft to raise its offer price, perhaps to as high as $35 per share. The company could also put more pressure on Yahoo! by making a tender offer directly to Yahoo! shareholders, the largest of which now includes hedge funds that typically seek quick exits. It could also try to remove Yahoo!'s board when it comes up for election on March 13.
Yahoo! is also said to be seeking alternatives to Microsoft, including an alliance with Google. The Times of London reported today that the company is also considering a merger with Time Warner-owned AOL.
Yahoo!'s statement did not discuss alternatives to the Microsoft deal, though it acknowledged it would seek out possibilities.
"The board of directors is continually 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 all stockholders," the letter says.