Court Denies Yahoo Shareholders

Yahoo shareholders were denied a request by the Delaware Chancery Court to expedite their case against Yahoo, according to The Wall Street Journal. The request came as activist investor Carl Icahn is deciding whether or not to continue his proxy battle to win control over Yahoo’s board of directors.

According to the WSJ, Icahn is believed to feel somewhat confident that he can still win some board seats. He is currently weighing the pros and cons of Yahoo's recently announced search advertising deal with Google that is expected to generate operating cash flow.

One major Yahoo shareholder told the WSJ that since the Microsoft and Yahoo deal is no longer an option, instead of taking over the entire board, Icahn might pursue only a couple of board seats. The Google and Yahoo deal includes “change of control” provisions, and if Icahn took complete control over the board, he could jeopardize the deal from going through.

Eric Jackson, another Yahoo investor, asked shareholders to compromise between Yahoo and Icahn by voting for a slate of five existing Yahoo board members and four of Icahn’s selected nominees, according to according to TheStreet.com.

On Monday, Delaware Chancellor William Chandler denied Yahoo shareholders’ request to bring their case to trial before August 1. This is good news for Yahoo’s board as its annual shareholder meeting does not take place until then. The plaintiffs, two Detroit pension funds, argued that the case needed to be expedited because the recent deal between Yahoo and Google intended to keep shareholders from supporting Icahn’s takeover efforts. Chancellor Chandler requested that both sides set a “prompt” schedule for hearing Yahoo’s motion to dismiss the case before August 1.