Sunnyvale, (CA) - Yahoo’s board of directors held an emergency meeting over the weekend to discuss the latest developments in Microsoft’s buyout offer. According to media sources, the board believes the bid, currently valued at $29.36 a share, undervalues Yahoo. The board is expected to reject the offer, something that will probably bring Microsoft into a full-scale battle for Yahoo.

According to the Financial Times, an inside source said the board was meeting late on Sunday. Currently, Yahoo execs believe Microsoft’s bid is too low. However, the seemingly low price is due in part to the slip in Microsoft’s share price in the past few months. Back on February 1st, Microsoft bid $31 cash or .95 shares of Microsoft stock for each Yahoo common stock. That offer had a total value of approximately $44.6 billion at the time. But Microsoft’s stock has since slipped to $29.36 a share.

According to the New York Times, Yahoo’s board is expected to reject Microsoft’s bid. Microsoft’s CEO Steve Ballmer is refusing to raise the bid because there are currently no other companies vying for Yahoo. In fact, Ballmer has hinted at lowering the price and eventually going directly to the shareholders if the board refuses to act on the offer.

UPDATE - Yahoo’s Chairman Jerry Yang has formally rejected Microsoft’s bids and Ballmer’s threat. In a public statement, Yang says the board is open to alternatives that "maximize" shareholder value (meaning more money).

"To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing. Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value," said Yang.