Microsoft speaks out after Yahoo rejection

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Following Yahoo's rejection of Microsoft's $44.6 billion (£22.3 billion) unsolicited takeover bid, the Seattle-based software maker has responded publicly to the rebuff it received from the internet portal's board.

"It is unfortunate that Yahoo has not embraced our full and fair proposal to combine our companies," Microsoft said in a statement to investors and media. "Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties."

On that basis, analysts and traders expect a prompt increase in Microsoft's offer for Yahoo, a company that comprises an internet portal and extensive online services and applications including email and photo hosting, as well as the number two advertising sales business online, trailing Google.

"We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. 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," the statement continued.

The original Microsoft bid, made on 1 February, valued Yahoo at $31 (£15.50) a share, and comprised both a cash and a share element. Since the initial offer, Microsoft's share price has slipped while Yahoo's has jumped from $19.13 to match the offer price. Microsoft, which is currently debt free, has also been in discussion with banks about potentially raising debt finance to bolster its ability to offer cash in any eventual deal.

Microsoft remains defiant in its efforts to take control of Yahoo, and signed off its official statement with a clear message to the company that it hasn't finished trying to win over the board and major investors.

"The Yahoo response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realise the value inherent in our proposal."

In a purely coincidental move, Microsoft announced shortly after the rebuff from Yahoo that it had agreed to acquire mobile device software business Danger. The company is best know as the software developer behind the Sidekick smartphone.

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