The Web firm's board responds to Microsoft's ultimatum with a jab at the current offer.
Yahoo is not opposed to Microsoft's bid for the Web media company, as long as it is at the right price, Yahoo's board said on Monday in a letter to Microsoft Chief Executive Steve Ballmer.
"We have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders," the letter said. "Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.
Yahoo is responding to a three-week deadline issued by Ballmer in a letter to Yahoo on Saturday for Yahoo to agree to Microsoft's $31 a share cash-and-stock offer or risk seeing the bid lowered.
Yahoo shares slipped 2 percent in premarket trading to $27.80, after closing at $28.36 on Nasdaq on Friday.
Directors of Sunnyvale, California-based Yahoo rebuffed Microsoft's original offer in February, saying it undervalued Yahoo and that it is seeking alternatives.
"Our board has been actively and expeditiously exploring our strategic alternatives to maximize stockholder value, a process which is ongoing," Yahoo's board said on Monday. "All of these actions have been driven by our overarching commitment to maximize stockholder value.
"Our board's view of your proposal has not changed. We continue to believe that your proposal is not in the best interests of Yahoo! and our stockholders."
Yahoo shareholders and analysts say Yahoo's best options are to find an ally to help demonstrate Yahoo is worth more as an independent player, or surprise the market with a strong show in its quarterly results.
The consensus on Wall Street is that no "white knight" will emerge to whisk Yahoo away from Microsoft and its proposed cash-and-stock offer currently valued at $42.2 billion.