Yahoo! rejects Microsoft bid

Global - Yahoo! has rejected a hostile takeover bid from Microsoft, arguing the US$44.6 billion offer "substantially undervalues" the internet company.

A Yahoo! statement said Microsoft's proposal substantially undervalued Yahoo!'s global brand, its large worldwide audience, recent investments in advertising platforms and its future growth prospects.

"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 said.

Microsoft said it was unfortunate that Yahoo! had not embraced what it said was a "fair offer".

Microsoft added that merging to two companies was in the best interest of all parties.

"The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," a Microsoft statement said.

Microsoft said it reserved the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realise the value of its proposal.