Microsoft pushes Yahoo bid forward despite rejection

Microsoft isn't taking no for an answer. The company responded Monday afternoon to Yahoo's rejection of Microsoft's $44.6 billion bid by saying it would continue pushing to acquire the struggling Internet company.

Yahoo announced earlier Monday that its board had unanimously rejected Microsoft's proposal on the basis of being "significantly undervalued" in Microsoft's bid. Microsoft had offered to spend 62% more per share than Yahoo was worth on the day of its acquisition proposal.

In a sign things could get messier, Microsoft didn't say it would be immediately raising its bid, as expected by some financial analysts. It also called Yahoo's move "unfortunate" and reiterated an intention to acquire Yahoo by any means necessary.

"As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal," Microsoft said in a statement.

"All necessary steps" includes several options, including a soft sale to Yahoo stockholders that would encourage them to persuade Yahoo's board, a tender offer directly to Yahoo stockholders that would have a more forceful effect because it would enable stockholders themselves to sell directly to Microsoft, a hostile takeover of Yahoo's board during the board's elections next month, and a higher bid.

That last option seems increasingly unlikely to happen soon. In Microsoft's response, it calls its proposal for Yahoo "full and fair" and says that it offers shareholders "superior value." "The Yahoo response does not change our belief in the strategic and financial merits of our proposal," Microsoft said.

If Microsoft chooses to pursue a hostile takeover of Yahoo's board of directors, the acquisition proposal could drag through until Yahoo's board goes up for elections in March.

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