Article Launched: 02/06/2008 06:05:08 PM PST
Yahoo Chief Executive Jerry Yang signaled to Microsoft Wednesday that he is in no hurry to accept its $44.6 billion take-over offer, saying the company will "take the time it needs to do it right."
His message came as the company was sued by several shareholders criticizing Yang for not working harder to secure a better offer or to improve Yahoo's performance.
In a complaint filed Friday in Superior Court in Santa Clara that came to light Wednesday, shareholders accuse Yang and other members of the board of directors for "failing to negotiate with Microsoft or otherwise give good-faith consideration to its offers" when the Washington State software giant made overtures to Yahoo more than one year ago.
In a letter announcing Microsoft's bid, Microsoft Chief Executive Steve Ballmer said he received a letter in February 2007 from Terry Semel, then Yahoo's chairman and chief executive, saying it wasn't "the right time" to enter into discussions of a deal given the potential benefits of certain changes, such as a company reorganization, that were under way.
At the time the letter was sent, Yahoo's stock was trading around $29 per share; it subsequently fell 34 percent.
"A year has gone by and the competitive situation has not improved," Ballmer wrote.
Shareholders represented by Barrett, Johnston & Parsley, a Nashville, Tenn., law firm, accuse board members of entrenching themselves in power in order to continue
to receive annual compensation that ranged from $588,000 to almost $650,000 for individual directors in stock, options and cash.
A second shareholder lawsuit filed in Superior Court in
Both suits ask a judge to rule that Yang and other board members have breached their fiduciary duty. Yahoo said it has a policy of not commenting on pending litigation. In his message to employees Wednesday morning, Yang also noted the company had hired "top advisors," including lawyers from Skadden Arps, investment bankers from Goldman Sachs and Lehman Brothers and public relations people from Abernathy McGregor and Robinson Lerer & Montgomery.
Separately, Yahoo launched a new version of Zimbra, its online e-mail and calendar software for businesses.
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