I think you’ll find $31 a share is plenty
People (apparently) briefed on the matter have confided to the New York Times’ business section, 'DealBook', that Microsoft will authorise a proxy fight at Yahoo! this week.
It said that if Yahoo! doesn’t enter into talks, Microsoft would have until the 13th March to nominate a new set of directors and try to replace the current board with them.
As we understand it, a proxy fight is a situation when a company attempts to convince shareholders to use their proxy votes, to install a new board of directors at the company it wants to acquire. The new board is expected to have a more favourable view on the acquisition than the old one.
Microsoft chairman Bill Gates had continued the tough talking from Microsoft on Monday, when he told The Associated Press: “We sent them a letter and said we think that's a fair offer," adding "they should take a hard look at it.”
UPDATE 09:00 20/2: Yahoo! has put new severence conditions in place to protect current employees in the event of a change in control of the company.
Now, if an employee loses their job without cause or, as Yahoo! is said to define it, leave for good reason, they will be entitled to between four months and two years full pay. See if you can guess who gets the full two years. Yup, the very same executive officers who have implimented these measures.
Whether or not this was a direct response to the prospect of a proxy fight is unclear, but two year's pay would be a handy bit of compensation for the current board if it did get booted out. Of course this would also add to the cost of the acquisition for Microsoft, assuming they intend to make personnel changes if they get control.
