Yahoo Inc.'s board of directors plans to reject Microsoft Corp.'s unsolicited $44.6 billion acquisition offer, according to media reports.The decision, which was reported Saturday by The Wall Street Journal, came after a series of meetings over the past week, during which Yahoo's board decided the $31-a-share offer "massively undervalues" the Web behemoth. The Journal cited an unnamed person familiar with the deal. Similar reports appeared later in the New York Times and the Washington Post. A letter from the Yahoo board formally rejecting the acquisition offer is expected to be issued Monday, the Post reported in its Sunday editions. The board of Sunnyvale, Calif.-based Yahoo (YHOO:Yahoo! IncNews, chart, profile, more Last: 29.20+0.16+0.55%
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:YHOO 29.20, +0.16, +0.6%) also felt the $31-a-share price doesn't take into account the risk of entering into an agreement that could ultimately be voided by regulators, the Journal reported. The board believes Redmond, Wash.-based Microsoft (MSFT:Microsoft CorporationNews, chart, profile, more Last: 28.56+0.44+1.56%
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:MSFT 28.56, +0.44, +1.6%) is trying to take advantage of some recent weakness in Yahoo's share price in order to "steal" the company, the report said. The company insider quoted in the report believes Yahoo will likely not consider any offer less than $40 a share. According to the Post, many analysts believe Microsoft might be prepared to raise its bid to $35 a share. No other offers to acquire Yahoo have surfaced, the Times reported, citing people familiar with the situation. If cash-rich Microsoft were willing to pay the $40 price, it would mean increasing its original cash-and-stock bid by more than $12 billion. Yahoo's shares ended Friday's trading at $29.20, up 16 cents, roughly reflecting the value of the stock in light of the diminshed value of Microsoft's shares since the offer was announced on Feb. 1. Microsoft's shares added 44 cents to close at $28.56 on Friday. Yahoo has some "poison pill" provisions that could prevent any hostile takeover, and Microsoft would probably have to get rid of the company's current board to get past them, the Journal said. Yahoo's board appears to be betting that Microsoft doesn't want to "go hostile," the newpaper reported. The board also has kept its strategic options open, including reportedly considering outsourcing to archrival Google Inc.