Yahoo To Reject Microsoft's Buyout Offer

Yahoo's board of directors on Monday will officially reject Microsoft's $45 billion bid to takeover the Web portal leader, concluding that the offer "massively undervalues" Yahoo, according to a store in Saturday's Wall Street Journal.

Not only is the $31/share bid too low, but it "also doesn't account for the risks Yahoo would be taking by entering into an agreement that might be overturned by regulators," the story said, adding that a board source said the board would be "unlikely to consider any offer below $40 per share." Whether this turns into a hostile takeover situation is up to Microsoft, but the move was expected as few boards would accept such an offer without trying to negotiate for more. Microsoft would be equally unlikely to have opened bidding with its top price.