Yahoo rejects Microsoft takeover bid

LONDON - Yahoo's board of directors has rejected Microsoft's £22.4 bn takeover bid.

A deal may still be possible, however, with Yahoo claiming that the board remains "committed" to developments that would increase value for all shareholders.

In a statement released today, Yahoo detailed why it believes Microsoft's bid fails to offer value for money, despite Microsoft chief executive Steve Ballmer offering Yahoo a 62% premium on its share price as of 31 January.

The statement from Yahoo's board of directors said: "After careful evaluation, the board believes that Microsoft's proposal substantially undervalues Yahoo, including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cashflow and earnings potential, as well as our substantial unconsolidated investments."

The announcement follows weekend reports of defensive moves by Yahoo to merge with AOL to fend off an unsolicited takeover from Microsoft

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