Skadden Helps Yahoo Buy Time With Legal Maneuver
Lawyers at Skadden, Arps, Slate, Meagher & Flom advising Yahoo used an unusual legal maneuver to give the company’s board more time to consider its response to Microsoft’s takeover bid.
Yahoo board members contended the company’s stock was worth $37 a share, but Microsoft was willing to offer only $33, the Wall Street Journal. The price dispute and concerns over Yahoo plans to outsource online advertising to Google led Microsoft CEO Steve Ballmer to announce he was walking away from the deal.
The legal maneuver was a March 5 vote by the board to amend the company’s bylaws and push back the deadline for nominating directors, the Recorder reports. The delay stalled the threat of a proxy fight.
Yahoo announced yesterday it would hold its annual meeting July 3. Under the revised bylaws, the deadline for nominations is 10 days after the annual meeting announcement.
Kenton King, the Skadden partner leading the deal team, said the tactic is rarely used. “It had the advantage at the same time of giving shareholders more time and also taking some pressure off the situation,” King told the Recorder.
The failure to reach a deal disappointed some Yahoo shareholders and raised the prospect of lawsuits, Portfolio.com reports. One law firm, Bernstein Litowitz Berger & Grossman of New York, already is pursuing a class action against Yahoo in the Delaware Court of Chancery. A court order makes it the lead law firm for any new Yahoo lawsuits filed there.
