Yahoo Bid Pulled

More than three months after proposing to acquire Yahoo, Microsoft has withdrawn its offer and says it does not plan to attempt a hostile takeover. The standoff apparently ended when the two companies could not agree on a price and Microsoft withdrew its bid. Possible next steps include refocusing on Microsoft online services and advertising platforms, making other acquisitions and business deals, or rebuilding the online business around the products Microsoft acquired from aQuantive in 2007.

Hostile Bid Averted

On Feb. 1, 2008, Microsoft revealed its offer to acquire Yahoo with a combination of cash and stock that was then worth US$44.6 billion, or US$31 per Yahoo share—a 62% premium over Yahoo’s US$19.05 share price at the time. The offer was revealed on Microsoft’s Web site, and Yahoo’s stock price immediately rose more than 50% as investors anticipated the deal closing. Within a week, Yahoo’s board of directors rejected the deal with a public note stating that Microsoft’s offer “substantially undervalued” the company.