Microsoft to Engineer Proxy Fight for Yahoo's Board

Ballmer, Gates playing hardball
By Jonas Oransky,  Newser Staff
Posted Feb 19, 2008 12:49 PM CST
Microsoft to Engineer Proxy Fight for Yahoo's Board
This combination of two file photos shows Microsoft CEO Steve Ballmer, left, and Yahoo CEO Jerry Yang. Yahoo Inc. on Monday, Feb. 11, 2008 spurned Microsoft Corp.'s $44.6 billion takeover bid as inadequate, betting that it can elicit a higher offer from the world's largest software maker or find another...   (Associated Press)

Rather than raise its $44.6 billion hostile takeover bid, Microsoft will start a proxy fight at Yahoo, with an eye to nominating a slate of directors for the board by mid-March. The hardball tactic will cost less than upping the bid—$20 million or $30 million will pay a proxy solicitor and buy shareholder mailers—but it comes with real downsides, the New York Times reports.

Microsoft would have preferred a friendly takeover, because bitterness could provoke Yahoo employees to quit en masse. But the software giant has made it clear it will stop at nothing—and the Yahoo board elects all of its directors at once, making it a ripe target. Microsoft’s stock has sunk 12.8% since the offer was revealed 2 weeks ago. (Read more Microsoft stories.)

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