Yahoo officially rejected Microsoft’s $31-per-share takeover offer today, saying the bid, which represents a 62% premium, “substantially undervalues” the company, Bloomberg reports. The statement didn’t specify a counteroffer, but Yahoo is seeking $40 a share, the Wall Street Journal reports. “Yahoo thinks they’re worth more because of the plans they’ve implemented that have yet to come to fruition,” explained one analyst.
The saga is far from over. Microsoft’s offer contained a note: “Microsoft reserves the right to pursue all necessary steps” to close the deal. The combined company would control about a quarter of the Internet’s banner ad business, which Yahoo dominates. Within minutes of the stock markets opening, Yahoo's stock had risen 2.2%, while Microsoft's had fallen 1.3%.