Yahoo on Thursday postponed its annual meeting giving itself more time to prepare a defense - or negotiate a sale to Microsoft that would cause investor Carl Icahn to call off the mutiny.
The showdown pitting Yahoo'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 unsolicited takeover
bid, which was withdrawn this month in a pricing
Spurred by shareholders upset with Yahoo's board's
handling of Microsoft's last offer of $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, the company
disclosed Thursday. A third shareholder plans to submit
another opposing sale 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
The postponement of Yahoo's annual meeting "raises a lot
of interesting questions, since 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 Icahn.
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.
Microsoft has reportedly proposed buying Yahoo's search
Yahoo also has been exploring a possible partnership
that would allow Internet search leader Google to
sell some of the ads that appear alongside the results
users see when they run searches on Yahoo's Web site. A
two-week trial completed last month indicated Google's
technology would help to boost Yahoo's profits.
But any alliance between Yahoo and Google would face
antitrust obstacles because the two companies combined
control more than 80 percent of the U.S. search market.
If Microsoft were to negotiate a similar partnership
with Yahoo, instead of trying to buy its rival outright,
it might not face the same antitrust problems because
Google would still control more than half the market.