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March 05, 2008

Yahoo's Stall Tactics

Continuing on the path to avoidance, Yahoo has announced that it has extended the deadline to nominate directors to its board. The company could also potentially try to postpone its annual meeting this year to sidestep a possible proxy contest, according to the New York Times.

The move comes at a time when Microsoft, who has been hunting Yahoo with an offer now valued at about $41.2 billion, was preparing to turn up the heat on its takeover by starting a proxy contest next week with a deadline of Thursday. At which time, the company was hoping to nominate a slate of directors to Yahoo’s board.

But as of today, Yahoo said it has extended the deadline for nominating directors to its board from March 14 until 10 days following the announcement of the date for this year's annual meeting of shareholders.

"The amendment will give stockholders who want to nominate one or more directors, including Microsoft Corporation, more time to do so," Yahoo said in a statement. "The amendment does not preclude any party from nominating one or more directors at any time prior to the new deadline. (The extension) it will allow Yahoo's board to continue to explore all of its strategic alternatives for maximizing value for stockholders without the distraction of a proxy contest."

According to Delaware laws, a public company can go no longer than 13 months without holding an annual meeting, the Times reports. Yahoo’s meeting last year took place on June 12, and a date for this year has yet to be set. Yahoo is incorporated in Delaware.

The extension of an annual meeting could allow Yahoo the opportunity to seek other partners or attempt to finesse Microsoft into hiking up its offer before the proxy fight between the two companies further escalates, a source told the Times.

Microsoft’s offer began at about $44.6 billion. Since it made the bid, Yahoo Chairman and former CEO Terry Semel has announced his decision to step down from his role, to be replaced by board member Roy Bostock. The company has also stepped up talks with Time Warner over forming a possible alternative to Microsoft's’s offer, reports the Wall Street Journal.