Microhoo! Drama Continues By Proxy

The Microsoft and Yahoo! telenovela continues with a new update: having been snubbed by the Yahoo! board of directors for an offer that "substantially undervalues" Yahoo!, Microsoft has now hired a law firm that specialises in proxy battles - just the kind of fight that will happen if Microsoft wants to go against the Yahoo board's wishes and take over the company via the shareholders:

A proxy fight would see Microsoft nominate a group of directors sympathetic to a deal for shareholders to vote on at Yahoo's annual meeting.

The move would be cheaper than raising its $31-a-share offer, analysts say.

...it is thought that even offering an extra $1 a share would cost Microsoft an additional $1.4bn, while waging a proxy fight could cost between $20m and $30m.

Microsoft has until March 14 if they're going to forcibly replace the board of directors to initiate a hostile takeover.

But Yahoo! isn't taking the news lying down; it gets even better: Yahoo! has put a whole bunch of severance benefits for employees into effect, and added a provision that if the company is sold within two years, the severance packages double.

This would make it even more enticing for employees to quit Yahoo! after a takeover and facilitate a brain drain from the company if Microsoft succeeds in its hostile takeover attempt.

Yes folks, it's getting ugly, and I can't wait for the next move!

Microsoft steps up Yahoo campaign [BBC News]
(Image credit: Flickr user Joe Manna)