In a routine filing with the Securities and Exchange Commission, Yahoo has revealed that it is now facing seven lawsuits brought by groups of shareholders over its rejection of Microsoft’s recent $31-per-share takeover offer. The suits allege Yahoo’s board has breached its fiduciary duty to investors by rejecting Microsoft’s unsolicited buyout offer; Yahoo rejected the offer on February 11, saying it significantly undervalued the company. At the time it was made, Microsoft’s bid was worth $44.6 billion.
Microsoft has since said it won’t be raising its offer, but the company also doesn’t intend to back down: the company is currently working to nominate its own candidates for Yahoo’s board of directors, then have those candidates approve the takeover offer. Industry watchers generally agree Microsoft’s efforts to take over Yahoo by proxy are a long shot. If necessary, Microsoft has also indicated it may be willing to offer to purchase Yahoo shares directly from shareholders to gain a controlling interest in the company. Microsoft must nominate candidates to Yahoo’s board by March 14
Industry reports have Yahoo investigating partnerships with News Corp. and Google to stave off Microsoft, but so far those talks have not borne any fruit.
Two Detroit pension funds are among the shareholder groups suing Yahoo; their suits were filed in the Court of Chancery in Delaware along with one other. Four other suits were filed in California Superior Court.
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