Yahoo!’s shareholders have launched a lawsuit against the board as it faces the challenge of a hostile takeover from Microsoft.
According to a report on MediaGuardian.co.uk, the suit, filed by two investment funds from Detroit, accuses Yahoo!’s board of adopting a “just say no to Microsoft” attitude, which has led to “improper defensive measures” and negotiations with other firms that would be “destructive to shareholder value”.
Lawyers yesterday asked the courts to consolidate the suit with several previous cases that all aim to prosecute Yahoo!’s board for not acting in the interests of shareholders, said MediaGuardian.
The latest legal action was launched on Friday by the Police & Fire Retirement System and General Retirement System of the City of Detroit.
It claimed that “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”.
Last week, Yahoo! approved plans – which the lawsuit seeks to invalidate – for severance packages which could cost a new owner as much as $1 billion to implement, according to one estimate.
Yahoo! rejected Microsoft’s $45 billion (£23 billion) takeover bid, saying that it substantially undervalued the company (see Yahoo! Rejects Microsoft Takeover Bid).
It was thought that Microsoft would make a higher offer, however, it has no and has now recruited a firm which specialises in “proxy” takeovers.
This would see Microsoft select replacement directors for the Yahoo! board who would be favourable to a takeover.
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