San Francisco, CA – Yahoo To Microsoft Sweeten The Deal, Or No Merger.

San Francisco, CA – Yahoo Inc. spurned Microsoft Corp.’s $44.6 billion takeover bid as inadequate Monday, betting that it can elicit a higher offer from the world’s largest software maker or find another way to deliver a comparable payoff to its shareholders.

In its formal response, Yahoo said its board had concluded Microsoft’s unsolicited offer “substantially undervalues” the Sunnyvale-based company.

Many analysts believe Redmond, Wash.-based Microsoft will eventually raise its bid to $35 to $40 per share, sweetening the pot by $5 billion to $12 billion in an effort to negotiate an amicable sale.