Yahoo shareholders sue the company over Microsoft deal

Yahoo faces shareholder ire over failed Microsoft bid
  • (IDG News Service)
  • — 07 May, 2008 08:37

Two public pension funds from the city of Detroit plan to expand a complaint against Yahoo CEO Jerry Yang and other members of Yahoo's board of directors, saying they failed to act in the best interest of shareholders in rejecting Microsoft's bid to buy Yahoo.

Their original lawsuits were filed separately on March 5 over what the pension funds deemed an unreasonable attempt by Yahoo's management team to thwart an acquisition by Microsoft that would have paid shareholders a 62 percent premium over Yahoo's pre-bid stock price. The lawsuits have been combined into a general class-action lawsuit, and lawyers representing the pension funds say they will seek damages for the loss of shareholder value allegedly caused by Yahoo management over the failure of the bid this weekend.

The actions taken by Yahoo's CEO this past weekend confirm that the company's board of directors pursued all manner of value-destructive third-party deals to fight off Microsoft's bid, lawyers representing the Police & Fire Retirement System of the City of Detroit and the General Retirement System of the City of Detroit said in a statement Monday.

Those actions constitute a breach of fiduciary duty, they allege.

Microsoft announced its original US$44.6 billion acquisition bid on February 1, sending Yahoo shares up as high as $29.83 each on the day, a huge increase from $19.18 before the offer. Yahoo first rejected the bid on February 11, but did enter talks with Microsoft. In the end, the deal fell apart despite a sweetened offer of $33 per share from Microsoft.

Yahoo shares fell 15 percent on Monday to US$24.37, after dropping to as low as $22.97 earlier in the day.

Yahoo appears to have sought several alternatives to the Microsoft deal, including reportedly trying a tie-up with Google on its search advertising business. Lawyers for the pension funds, Bernstein Litowitz Berger & Grossman, say attempts at such deals show that Yang never negotiated with Microsoft in good faith.

Yahoo did a two-week test run of Google ads in April, but hasn't disclosed the results.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Dan Nystedt

IDG News Service
Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Compare & Save

Deals powered by WhistleOut
WhistleOut

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?