7 shareholders sue Yahoo over Microsoft takeover bid
Updated: 2008-02-29 07:07
Seven shareholders have filed lawsuits against Yahoo Inc. alleging the fading Internet pioneer mishandled its response to Microsoft Corp.'s unsolicited takeover bid.
The California-based company provided a breakdown of the suits in an annual report filed Wednesday with the Securities and Exchange Commission. The documents didn't provide any new information about Yahoo's attempts to fend off Microsoft, which is threatening to pursue a hostile takeover unless a friendly deal can be negotiated.
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A man drives a Mini Cooper with a Yahoo! logo in front of Yahoo! headquarters in Sunnyvale, California, Feb. 1, 2008. [Agencies] |
Yahoo's board has said Microsoft's offer, originally valued at 44.6 billion U.S. dollars, is lacking. Microsoft has not backed off and is now preparing to overthrow Yahoo's 10-member board, which includes the company's co-founder and chief executive, Jerry Yang. Microsoft faces a March 14 deadline to nominate an alternate slate of directors.
The impasse has triggered four shareholder suits in California's Santa Clara County Superior Court. Three other complaints have been filed in Delaware by pension funds that own Yahoo's stock.
Five of the suits allege Yahoo's board breached its duty by refusing Microsoft without trying to negotiate a better deal, according to the annual report. The two other suits allege Yahoo unfairly favored Microsoft's "inadequate" bid even though the board eventually turned down the original cash-and-stock offer of 31 dollars per share.
Because Microsoft's stock price has declined by 13 percent since the pursuit of Yahoo began, the bid is now worth 28.94 dollars per share, or about 40 billion dollars.
Since its Feb. 11 rebuff of Microsoft, Yahoo has been exploring other options that would provide its shareholders with a better payoff than Microsoft's proposed takeover. The other possibilities have included combining forces with News Corp.'s online hangout MySpace.com, or forming an advertising alliance with Internet search leader Google Inc.
While trying to elude Microsoft, Yahoo also has been laying off workers in an effort to boost its sliding profits. The annual report didn't provide any further specifics about the purge, which began Feb. 11. Management has previously estimated Yahoo will eliminate 1,000 jobs, or about 7 percent of its work force.
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