Over the weekend, Microsoft laid down the law for Yahoo—accept our bid during the next three weeks, or this is going to get ugly via a proxy battle, which could result in the removal of Yahoo's board of directors. This morning, The New York Times reports that Yahoo reiterated its rejection of a takeover offer from Microsoft, again calling it too low.

"Our board's view of your proposal has not changed," Yahoo said in a statement. "We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders. Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo. Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal."

For its part, Microsoft has insisted it sees no reason to raise its bid, because Yahoo, which has discussed alternative deals with other companies, has no competing offers, the report said.

"Basically Microsoft infers that Yahoo has no alternative deals in the offing, therefore there is no need to raise its price," said Michael Klausner, a Stanford Law School professor who specializes in corporate law and governance, in the article. "Microsoft still prefers a negotiated deal to a proxy fight."

(Image credit: NYT)