Yahoo vs. Its Investors: Let the Litigation Begin

It is really hard being right, but someone has to do it. Now we see that some Yahoo shareholders are getting really pissed off with the Board and simply aren’t going to take it any more. This from the AP via Yahoo News:

                        DOVER, Del. - Two Detroit pension funds have sued Yahoo Inc. and its board of directors, saying they breached their duties to shareholders in trying to thwart a takeover by Microsoft Corp.

The lawsuit was filed in Delaware Chancery Court
on Thursday by lawyers representing Detroit’s police and fire
retirement system and general retirement system, as well as “all other
similarly situated public shareholders.”

According to the lawsuit, Yahoo’s board is pursuing “value-destructive” third-party deals in an effort to fight off Redmond, Wash.-based Microsoft,
which on Feb. 1 announced a takeover bid of $31 per share in cash and
stock, a 62 percent premium over Yahoo’s previous day’s closing price.

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“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.”

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“An imminent proxy fight necessitates judicial intervention since it
poses a deadline for Yahoo’s board to place shares in friendly hands,”
according to the plaintiffs, who allege that Yahoo board members have
placed “personal distaste for Microsoft” ahead of shareholder welfare.

“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.

If this isn’t a wake-up call to Yahoo’s Board and its advisers I don’t know what is. The writing is on the wall, guys. You’d better have some serious cards up your sleeve, arrows in your quiver of whatever other hackneyed phrase you’d like to roll out, because time is running short. Being labeled as un-shareholder friendly and obstructionist isn’t the best thing for your company or your careers, so get off the stick and take some decisive steps. Because maybe, just maybe, if you embrace Microsoft you might be able to squeeze a little more value out of the deal. But each day that goes by without this insight will cost both you. Big time.

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COMMENT:

AUTHOR: tweetip

EMAIL: tweetip@mac.com

URL: http://www.tweetip.com

DATE: 02/23/2008 12:59:13 PM

The _NOT_ serious card up Yahoo!’s sleeve is Slurp.

Each day we laugh (& cry) watching the sad comedy of Slurp vs Googlebot hitting our servers.

Yahoo! has been told to turn off Slurp - but they can’t - can they…

The only value we see in Yahoo! is their collective data - to be mined - to be filtered, scraped, mangled, and put back together. Lots of secrets in there. Bet ya we’d find early deep discussions about the subprime issue. In fact, we know we would :)

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