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Microsoft must up bid for Yahoo

February 12, 2008

Yahoo’s board is expected to officially reject Microsoft’s takeover bid concluding the $44.6 billion offer “undervalued” the company, and want an offer equivalent to $40 a share, rather than the $31 offered by Microsoft.

The company’s share price has increased so much since the offer was made that Yahoo’s market value now exceeds Microsoft’s offer, despite a 62 per cent premium. Microsoft would have to offer a further $12 billion for the firm to match the $40 per share offer, which would make the Yahoo deal its biggest ever takeover.

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