Yahoo!'s board decided that the $31-a-share offer "massively undervalues" Yahoo!, according to a report published on
The Wall Street Journal's
Web site Saturday that cited one person familiar with the situation. The board also decided the offer doesn't properly account for the risks faced by Yahoo! if it agreed to a merger but regulators overturned it, the report said.
Yahoo!'s board plans to send the software giant a letter Monday explaining its opposition to the hostile bid, the report said. Yahoo! would be unlikely to consider any offer of less than $40 a share, the report also said.
was first to report news of the board's rejection.
The New York Times
later published a story citing multiple sources involved in Yahoo!'s discussions confirming the rejection plans.
announced the bid Feb. 1, saying a merger would generate more than $1 billion in annual synergies.
Yahoo! shares gained 16 cents Friday to close at $29.20. Microsoft shares closed the session up 44 cents at $28.56.
This article was written by a staff member of TheStreet.com.