Yahoo! rejects Microsoft takeover bid

Yahoo has formally rejected Microsoft's USD 44.6 billion takeover bid.

The decision was made on Friday, with sources leaking the news to various organisations over the weekend.

In a statement, Yahoo said that its board "unanimously concluded that the proposal is not in the best interests of Yahoo and our stockholders." Yahoo also said that the offer substantially undervalues the company, failing to take into account its strong brand and global audience.

"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 statement read.

Microsoft made an unsolicited offer to acquire Yahoo! in a deal worth USD 44.6 billion on February 1.

Microsoft could now increase its offer, or it could take its offer directly to Yahoo shareholders.

"Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal," CEO Steve Ballmer wrote in his original offer letter, suggesting that a hostile takeover remains an option.