Over a million developers have joined DZone.

Yahoo Good Faith Issues Mount

·

 

Thanks to court disclosures stemming from a suit against Yahoo brought by two Michigan pension funds invested in the firm, Microsoft’s offer of 40 bucks a share in January of 2007, when Yahoo’s stock was in the mid-20s like now, has been confirmed.

Obviously that puts still more pressure on the Yahoo board for Yang-toadying. 

The suit seeks to get the company to drop its takeover defenses and charges that Yahoo CEO Jerry Yang structured what is basically a “scorched earth” severance plan that would have cost Microsoft $2.1 billion-$2.4 billion – depending on whether it paid $31 or $35 – and, in the end, Microsoft would have been left without much Yahoo staff if it bought the joint since Yahoo folk were incentivized to quit and claim severance benefits. 

Yang’s severance experts advised against such a move. 

Yang, meanwhile, has been discovered to have had a press release drafted rejecting a Microsoft offer three months before Microsoft’s unsolicited offer came. 

It also turns out that the day before Microsoft made its $31 a share offer public on February 1 Yahoo management rejected the idea of outsourcing search advertising to Google for fear Google would become a monopoly. Its reservations didn’t last long given the subsequent Yahoo-Google test and posturing. 

Yahoo, as one might imagine, is ticked the judge unsealed parts of the investor suit. It claims the revelations could be used in a proxy fight over control of the company, which is exactly what is happening. 

Carl Icahn is using the revelations to call for Yang’s head on a platter. 

“It’s no longer a mystery to me,” he told the Wall Street Journal Tuesday, “why Microsoft’s offer isn’t around. How can Yahoo keep saying they’re willing to negotiate and sell the company on the one hand, while at the same time they’re completely sabotaging the process without telling anyone.” 

He said he was “amazed at the lengths that Jerry Yang and the board went to entrench themselves in this situation.”

Topics:

Opinions expressed by DZone contributors are their own.

The best of DZone straight to your inbox.

SEE AN EXAMPLE
Please provide a valid email address.

Thanks for subscribing!

Awesome! Check your inbox to verify your email so you can start receiving the latest in tech news and resources.
Subscribe

{{ parent.title || parent.header.title}}

{{ parent.tldr }}

{{ parent.urlSource.name }}