I don't get the whole Microsoft buying over Yahoo fiasco, why can't Yahoo just say...?

Question

'Look, we don't want Microsoft to be our boss so it's a no deal, bye and I'm going to hang up.' if Yahoo is so reluctant about the whole thing?

Answer 1

The Yahoo board of directors has a fiduciary duty to maximize shareholder value.  If Microsoft offers an amount that Yahoo's board thinks that Yahoo cannot achieve from its normal operations, it must recommend the merger to its shareholders.  If a negotiated agreement cannot be reached, Microsoft can make a tender offer directly to Yahoo shareholders to purchase all of Yahoo's shares at a premium.

Answer 2

Yahoo is obligated (their board of directors) to do what is in the best interest of their stockholders (the board has a fiduciary responsibility under the law).  Therefore, if the Yahoo stock price on the open market is $30.00 (example) and Microsoft offers the stockholders $35.00 a share; then the board has to sell to Microsoft or the holders of Yahoo stock at the time of the offer would be leaving $5.00 on the table.  The board however, can negotiate or hold out for even a higher price (say $40.00) by negotiating for a higher price.

Answer 3

Because Yahoo! management doesn't own the company. The shareholders do.