Yahoo Shareholders Strike Back

I wrote about Yahoo shareholders filing suit recently, calling Yahoo on the carpet for rejecting another bid from Microsoft a year before the recent $44 Billion offer. In response to Yahoo's board rejecting this current bid of $44 Billion, Yahoo shareholders have filed another suit. This lawsuit is the second one alleging Yahoo's board is not looking out for its shareholders' best interests.

The group of shareholders bringing the law suit against Yahoo is the Wayne County Employee's Retirement System of Michigan. This lawsuit is not yet a class action suit involving all of the shareholders, like the previous lawsuit, but chances are good it will become one. From the lawyer representing the retirement system group:

"We want the board to be responsible and to take this offer seriously, review it appropriately, and respond appropriately," David H. Fink, a lawyer for The Miller Law Firm of Rochester, Mich., which is representing the retirement system, told InformationWeek Tuesday. "Just saying no is not an appropriate response."

The class action lawsuit from last year was filed in San Francisco. This law suite was filed in Delaware. Both lawsuits accuse Yahoo of looking out for the interests of the Yahoo board over the interests of the Yahoo shareholders. This current lawsuit does not bring board salaries into question like the other one does, and it has not yet gotten any shareholders outside of the initial filing group to sign on.

When the Microsoft hostile takeover offer was made, Yahoo shares were valued at under $20. The $31 per share that the $44 Billion offer works out to is nearly double what Yahoo was recently valued at. Shareholders feel that is enough, and that the offer should be accepted. Yahoo's board thinks that offer dramatically undervalues the company and wants either a higher offer, or, ideally, a way to remain autonomous by throwing in with another company altogether.

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