Feeds

Yahoo! shareholders thump Yang in the fiduciaries

Detroit gets nasty

Combat fraud and increase customer satisfaction

In late February, after Yahoo! famously rejected Microsoft's initial $44.6bn bid for the company, two share-holding Detroit pension funds filed a class action lawsuit against Jerry Yang and the Yahoo! board, claiming a "breach of fiduciary duties".

And now they're really peeved.

Late last week, Microsoft upped its offer to $47.5bn - or $33 a share. But Yahoo! rejected that too, and Steve Ballmer officially walked away from the bargaining table. In response, the Police & Fire Retirement System of the City of Detroit and the General Retirement System of the City of Detroit are back on the war path, vowing to file a fresh complaint against Yang and Co.

Rather than accept Ballmer's entreaties, Yahoo! is toying with the (legally-questionable) idea of posting Google-brokered ads to its search pages, and the Detroiters see this as proof that the company has no interest in making them large amounts of money.

"If Jerry Yang wants to understand why Yahoo shareholders are so unhappy, he should go to his new favorite search engine - Google - and look up the phrase 'breach of fiduciary duty,'" reads a canned statement from Mark Lebovitch, one of the lawyers representing the pension funds. "Yang's willingness to put the heart of Yahoo's search function in Google's hands to preclude a Microsoft bid representing a 70%-plus premium demonstrates that Yang was never negotiating in good faith."

Lebovitch didn't have time to speak with us. He was busy badmouthing Jerry Yang on national television. But we're sure he's less than pleased with Yahoo!'s stock performance since Ballmer walked away. Shares dipped 15 per cent yesterday, from $28.67 to $24.37 - though they rebounded to $25.72 before the bell this afternoon.

Many in the media are sure that other shareholders will soon follow suit with their own anti-Yahoo! suits, but this isn't likely. Any new complaint would be swallowed by the Detroiters' existing class action.

But two of the company's biggest shareholders - Capital Research and Management and Legg Mason - have taken the usual step of publicly chastising Yang and crew. "I'm extremely disappointed in Jerry Yang," Capital's Gordon Crawford told The Wall Street Journal. "I think he overplayed a weak hand. And I'm even more disappointed in the independent directors who were not responsive to the needs of independent shareholders."

Legg Mason's Bill Miller wasn't quite so harsh, but he did tell The Journal that Yahoo! should have lowered its asking price to $35 a share. Word is that the Yahooligans wouldn't budge from $37.

Could the deal still happen? Miller thinks so. In an interview with Bloomberg, he says Microsoft may return to the bargaining table. "I'm more puzzled by Microsoft's not going up to $37 than Yahoo's wanting to walk away," he said. "If they want to be a viable competitor, I would expect them to come back."

Sounds like wishful thinking to us. But you never know. A $50bn bid for Yahoo! is only slightly more ridiculous than a $47.5bn bid.

Yahoo! did not respond to our request for comment. But Jerry Yang discusses his post-Microhoo world here. ®

3 Big data security analytics techniques

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.