Yahoo plans to reject Microsoft bid of 44.6 billion dollars that is amounting to $31 per share according to Yahoo Finance press release.

In a bid to remain independent, Yahoo plans to reject Microsoft Corp.’s unsolicited takeover offer.Quoting sources familiar with the situation, the Journal reports that Yahoo’s board feels the offer of $31 per share “massively undervalues” the company. A letter spelling out the position is expected to be sent Monday. Yahoo also expressed concern that Microsoft’s offer does not account for risks to Yahoo should the deal be overturned by regulators.

The Journal source said the company would be unwilling to consider an offer below $40 per share, which would represent a $12 billion increase over Microsoft’s original $44.6 billion bid. It is unclear if Microsoft would be willing to increase its bid by such a significant amount.

If Microsoft is eager to buy Yahoo then a bid to up to $50 billion can make again Yahoo into hot seat to re-consider the offer. The possibility stands as we analyze how Microsoft willing to take over the next search engine giant.

Microsoft Chief Financial Officer Chris Liddell said the software company may issue some debt to finance the cash portion of its 50-50 stock and cash offer for Yahoo, instead of drawing down its entire $21 billion cash pile.

“It’s likely we’re actually going to borrow for the first time,” said Liddell in an annual strategy meeting with analysts before Yahoo’s apparent decision. “It’s going to be a mixture of the cash we have on hand plus debt.”

With this plan decision of Yahoo executive, I wonder how will price of shares go in the market. Google can rejoice now of this threat against their search engine.