Yahoo Postpones Annual Meeting, Fending Off Icahn
“Embattled Web pioneer buys more time as talks continues with Microsoft.”
Washington – Yahoo! Inc., the Internet web pioneer under siege from billionaire investor Carl Icahn, postponed its annual meeting after the billionaire threatened to oust its directors for snubbing a $47.5 billion takeover offer from Microsoft Corp.
The meeting, originally scheduled for July 3, will now take place at the end of that month, the Sunnyvale, California-based company said yesterday in a SEC filing. Yahoo said the deal gives regulators more time to review documents tied to the board election.
As discussions continue with Microsoft over the possibility of a tie-up, Yahoo has advised investors to resist the temptation of backing the billionaire corporate raider Carl Icahn’s attempt to snatch control of the company.
The move indicates Yahoo Chief Executive Officer Jerry Yang is under pressure to provide evidence that he can win investors back after rejecting an offer from Microsoft, which would have helped the combined company compete with Google Inc. Icahn said last week that he would seek control of the board if Yahoo directors failed to agree to a merger with the software maker.
Microsoft walked off from the negotiating table after Yahoo’s board spurned its offer of nearly 50 billion dollars (32 billion euros) on the grounds they feel it undervalues Yahoo.
“It is going to give them some time to either negotiate with Microsoft or deal with Carl Icahn,” said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware in Newark.
Icahn has apparently bought a stake of more than four percent in the California firm and says he plans to oust board members he accuses of botching recent takeover talks with Microsoft.
This is the second time Yahoo has delayed its shareholders meeting, generally held in May or June, in response to the high drama that has characterized the fallout from Microsoft’s bid to buy the company, first announced Feb. 1.
The first postponement came in March, when it looked as though Microsoft might wage its own proxy fight. Since it originally discarded the offer as undervaluing the company, Yahoo has faced intense pressure — and several lawsuits — from angry shareholders who saw no better option than selling to Microsoft.
Scott Kessler, a technology analyst at Standard & Poor’s credit rating agency in New York, said: “This is largely about getting more time to negotiate over potential corporate transactions and over Yahoo’s increasingly involved shareholder base.”
All of Yahoo’s directors are up for re-election at the meeting. In a regulatory filing, Yahoo revealed that Icahn has nominated a Microsoft-friendly slate of 10 boardroom nominees, which includes him, to replace all ten Yahoo board members at elections to be held at an annual meeting originally scheduled for July 3.
Besides, two other individual investors, Dallas Mavericks owner Mark Cuban and former Viacom Inc. Chief Executive Officer Frank Biondi Jr., said they plan to nominate themselves to the board, and a third plans to offer up a slate of nine people, Yahoo said. Those investors did not comply with Yahoo’s bylaws, the company said.
“We do not believe the election of the Icahn Entities nominees to our board of directors is in the best interests of our stockholders,” Yahoo said in a filing with the US Securities and Exchange Commission (SEC).
“Our board of directors urges you not to sign or return any proxy card sent to you by the Icahn Entities.”
Analyst Matt Rosoff of the independent firm Directions On Microsoft says it seems that Yahoo is stalling for time to close a deal on a partnership that might help appease angry shareholders.
Early this week Yahoo and Microsoft announced that they have reopened talks on a tie-up, but for a new deal that would most likely not be an outright takeover.
Yahoo’s shares slipped 20 cents to $27.33 during early trading on Nasdaq, well below the $31-a-share Microsoft was prepared to pay for the company.
At its annual meeting, Yahoo also faces a resolution on censorship and human rights over its controversial co-operation with the Chinese authorities.