Saturday, February 23, 2008
Yahoo Sued For Rejecting Microsoft Bid By Detroit Pension Funds
TheStreet.com - The suit was filed in Delaware Chancery Court on Thursday by lawyers representing Detroit's police and fire department retirement system as well as the city's general retirement system. "Rather than consider Microsoft's offer in good faith, Yahoo's board has taken various steps to defend against Microsoft, destroying or threatening to destroy shareholder value in the process," the suit claims.
More on this from the Associated Press. "Yahoo's directors cannot 'just say no' indefinitely to legitimate acquisition offers," the lawsuit reads. "Likewise, Yahoo's directors cannot pursue transactions that do not require shareholder approval for the primary purpose of making Yahoo unattractive to Microsoft." "Regardless of their emotional ties to Yahoo and their desire to retain their positions as directors at the company, the Yahoo directors owe fiduciary duties to Yahoo and its shareholders," the lawsuit states.
This is just the first in a series of blows Yahoo! Inc. and the Yahoo board will receive. All intended to push Yahoo into Microsoft's embrace. Unless Yahoo comes up with a feasible alternative, there's only two ways this is going to end. Either Yahoo's board accepts the offer, or they are forced to accept it by their own shareholders.
And the argument that Yahoo is holding out a higher bid from Microsoft is wearing out pretty fast. No one really believes it any more. Yahoo's shareholders, both insitititional and individual, have started piling the pressure, and if I were forced to take a guess, I'd say that Jerry Yang has about 45 days before he has to either accept Microsoft's offer, or hand in his own resignation. Come to think of it, he'll end up resigning even if he agrees to the offer. It can't be fun nowadays, if you were in Jerry Yang's shoes.
More on this from the Associated Press. "Yahoo's directors cannot 'just say no' indefinitely to legitimate acquisition offers," the lawsuit reads. "Likewise, Yahoo's directors cannot pursue transactions that do not require shareholder approval for the primary purpose of making Yahoo unattractive to Microsoft." "Regardless of their emotional ties to Yahoo and their desire to retain their positions as directors at the company, the Yahoo directors owe fiduciary duties to Yahoo and its shareholders," the lawsuit states.
This is just the first in a series of blows Yahoo! Inc. and the Yahoo board will receive. All intended to push Yahoo into Microsoft's embrace. Unless Yahoo comes up with a feasible alternative, there's only two ways this is going to end. Either Yahoo's board accepts the offer, or they are forced to accept it by their own shareholders.
And the argument that Yahoo is holding out a higher bid from Microsoft is wearing out pretty fast. No one really believes it any more. Yahoo's shareholders, both insitititional and individual, have started piling the pressure, and if I were forced to take a guess, I'd say that Jerry Yang has about 45 days before he has to either accept Microsoft's offer, or hand in his own resignation. Come to think of it, he'll end up resigning even if he agrees to the offer. It can't be fun nowadays, if you were in Jerry Yang's shoes.
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