Report: Yahoo! board to reject Microsoft

SUNNYVALE, Calif., Feb. 9 (UPI) -- The board of California-based Yahoo! plans to reject Microsoft's $31 per share offer, it was reported Saturday.

Citing an unnamed source, The Wall Street Journal reported the board, after a series of meetings to discuss the offer, decided Microsoft is trying to "steal" Yahoo! with by offering a price that "massively undervalues" the company. Board members believe the low stock price is temporary and would not consider anything less than $40 per share.

The source said the board plans to send Microsoft, based in Redmond, Wash., a letter Monday making the rejection official.

Some analysts have said the board is unlikely to completely reject Microsoft.

"An offer this strong does put the board under quite a bit of pressure," said Kent Hughes of Egan-Jones Proxy Services, a shareholder-advisory service.

To sweeten the deal, Microsoft has offered to pay a 62 percent premium when typical premiums in other recent acquisitions have ranged from 20 to 25 percent, Hughes told The San Jose (Calif.) Mercury News.