Tumblr feels that Yahoo’s $1.1 billion offer as “too low” and view it as “only a first offer”, according to sources close to to acquisition talks. Yahoo may have to significantly increase the offer to close the deal. An acquisition by some tech giant is likely in the cards for Tumblr, though, as sources say the company only has a few months of cash runway left.
The news comes after AllThingsD reported Yahoo was in advanced talks to buy Tumblr for $1.1 billion cash, and the portal’s board of directors are set to meet on Sunday night to discuss the potential deal. Forbes reports that Facebook and Microsoft have also expressed interest in acquiring Tumblr. However, Forbes says that Yahoo has lock-up agreement arranged with Tumblr that prevents the blogging platform from holding a “bake-off” or bidding war for the right to buy it.
If Yahoo comes to the table with an insufficient offer, which our sources say $1.1 billion qualifies as, Tumblr may be able to reject it and shop itself around some more.