MS proxy war vs. Yahoo

Microsoft is indeed planning to pursue a "proxy war" against Yahoo management, according to reports. The New York Times cites anonymous sources close to the matter, who claim that if Yahoo does not concede to Microsoft's $44.6 billion takeover bid, it will use its influence on Yahoo shareholders to elect a Microsoft-friendly board of directors. This could be a vastly cheaper alternative to raising the value of the bid: while it would jump $1.4 billion for each dollar added to the share price, orchestrating a coup at Yahoo could cost just $20-30 million, factoring in a proxy solicitor and the cost of mailings to each shareholder.

Aiding the rumor is a new statement from Microsoft chairman Bill Gates, who tells the Associated Press that his company has not been negotiating with Yahoo. "We sent them a letter and said we think that's a fair offer. There's nothing that's gone on other than us stating that we think it's a fair offer," says Gates. "They should take a hard look at it."

Nominations for Yahoo's new board of directors end on March 13th.

By Electronista Staff

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Investor, industry, Microsoft, Yahoo