Microsoft ratchets up pressure on Yahoo
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Your support makes all the difference.Microsoft is set to ask Yahoo shareholders to oust the internet pioneer's board if they do not agree to the $45bn (£23bn) takeover offer put on the table three weeks ago.
Steve Ballmer, Microsoft's chief executive, is seeking permission from his own board to plan a vicious proxy fight at the next Yahoo shareholder meeting, putting up a slate of Microsoft-sponsored alternative directors who would have instructions to accept the software giant's bid.
Approval for the plan could come within days, ratcheting up the pressure on Yahoo co-founder Jerry Yang, as the two sides engage in a game of brinkmanship which Yahoo's shareholders hope will prompt Microsoft to raise its offer.
Microsoft has taken soundings from its own investors and is believed to be reluctant to increase its $31-a-share cash-and-stock bid for Yahoo, every dollar of which would add more than $1bn extra to the cost of the takeover.
Although shareholder after shareholder in Yahoo has publicly stated that Microsoft should raise its offer to clinch a deal, they have been notably silent on what they would do if Micro-soft fails to raise. Yahoo shares were worth less than $20 each before Mr Ballmer made his offer on 31 January. Bill Gates, the co-founder and chairman of Microsoft, weighed into the fray this week, quashing suggestions that the company was already in talks to add more cash or Microsoft shares to sweeten its offer. "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," he said. "They should take a hard look at it."
Microsoft has until 13 March to put up a slate of directors to replace existing board members, with a vote coming at the annual shareholder meeting in June or July. All the existing board are up for re-election annually.
Innisfree, a legal firm specialising in soliciting support for proxy battles, was hired by Microsoft in the days after its hostile app-roach to Yahoo.
The software giant is determined to secure the takeover after almost two years of being rebuffed by Yahoo.
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