Yahoo
Yahoo is being sued for rejecting Microsoft’s take-over bid by Detroit’s fire and police retirement system, general retirements system and all other similarly positioned share-holders.
The board of directors are accused of chasing after “value-destructive” third party deals.
On Feb 1 2008, Microsoft announced a hostile takeover bid of $31 per share in cash and stock — 62 per cent more over Yahoo’s previous day’s closing price — which amounts to $44.6 billion. Yahoo spurned Microsoft, citing the offer as an inadequate.
The third party deal-making in question refers to talks with News Corp., who owns MySpace, and Google.
Yahoo is also preparing severance packages for its employees which would shoot up the cost of the acquisition.
According to the lawsuit, plaintiffs feel that Yahoo “cannot ‘just say no’ indefinitely to legitimate acquisition offers. 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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