"Yahoo formally rejected Microsoft, saying the offer is not in the best interest of shareholders, but adding it is willing to look other options.Also in a story that has largely been overlooked in the talk of a tender offer, Yahoo does have posion pill already in place. From a Feb 1st Reuters article:
'The board believes that Microsoft (MSFT, Fortune 500)'s proposal substantially undervalues Yahoo (YHOO, Fortune 500), including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments,' said the statement."
"In March 2001, Yahoo adopted a "stockholder rights plan" under which if anyone buys 15 percent or more of its stock -- aside from an agreed bid -- shareholders have the right to buy extra shares, according to a filing at the time.
"Because the rights may substantially dilute the stock ownership of a person or group attempting to take us over without the approval of our Board of Directors, our rights plan could make it more difficult for a third party to acquire us (or a significant percentage of our outstanding capital stock) without first negotiating with our Board of Directors regarding that acquisition," according to a Yahoo filing from 2007."