Yahoo Inc. postponed a looming showdown for control of its board on Thursday, giving itself more time to prepare a defence or negotiate a sale to Microsoft Corp. that would cause activist investor Carl Icahn to call off the mutiny.
The showdown pitting the slumping Internet pioneer’s board against Icahn and other unhappy shareholders was supposed to come to a head at the company’s July 3 annual meeting.
But Yahoo is dragging out the drama by pushing the meeting back to an undetermined date in late July.
This is the second time Yahoo has postponed its annual meeting, usually held in May or June. The previous delay, announced in March, gave Yahoo more time to explore alternatives to Microsoft’s takeover bid, which was withdrawn this month in a pricing disagreement.
Spurred by shareholders upset with Yahoo’s handling of Microsoft’s last offer of US$47.5 billion, Icahn has nominated a slate of candidates to replace the current directors—a process known as a proxy contest.
Two other unidentified shareholders intend to nominate themselves to become Yahoo directors, while a third shareholder plans to submit another opposing list of directors, according to Yahoo. The company said it believes these three shareholders haven’t met the rules for nominating alternate candidates, meaning they could be disqualified at the annual meeting.
The postponement of Yahoo’s annual meeting “raises a lot of interesting questions,” said Claudia Allen, a Chicago lawyer specializing in corporate governance issues.
“It could be that they are exploring some other potential transactions, with the most likely one being some sort of deal with Microsoft that satisfies Mr. Icahn,” Allen said.
Microsoft and Yahoo have acknowledged they have renewed talks about a possible transaction with Yahoo since Icahn mounted his challenge, although both companies say the discussions so far haven’t included another attempt by Microsoft to buy Yahoo in it entirety.
