Microsoft Threatens Yahoo Board with Proxy Fight
Microsoft Threatens Yahoo Board with Proxy Fight
April 7, 2008: Just when it seemed like things had gone quiet on the Yahoo acquisition front, Steve Ballmer, CEO at Microsoft has threatened a proxy fight should Yahoo continue to resist the negotiating table.
The world’s largest software company has threatened to take the matter directly to Yahoo shareholders should the board continue to rebuke Microsoft’s takeover bid. Ballmer has described the pace of progress over the last two months as “anything but speedy” in a letter to the Yahoo board.
“If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! Board,” wrote Ballmer in the letter.
Ballmer goes on to warn that should the offer be taken directly to shareholders that action will have an undesirable impact on the value of Yahoo and would be reflected in the terms of the proposal.
Microsoft has had its sights set on Yahoo for many years now, with merger discussions taking place multiple times over the last few years but these ultimately came to naught. The issue was forced in February when Microsoft made an unsolicited takeover bid for $US 33 ($AU 35) per share, putting the total value of the bid at $US 44.6 Billion ($AU 48.4 Billion).
On February 11, Yahoo rejected the bid claiming it was undervaluing the company and pursued alternative options with News Corp and Google, neither of which amounted to anything. The potential deal had sparked a wave of controversy, including a condemnation of the takeover by Google who believed it would threaten the future of the internet.
"We would be concerned by any kind of acquisition of Yahoo by Microsoft," Eric Schmidt, Google CEO, Eric Schmidt said at a conference in Beijing. "We would hope that anything they did would be consistent with the openness of the internet, but I doubt it would be."