What Would a Hostile Takeover of Yahoo Look Like?
How would a hostile offer by Microsoft for Yahoo play out? Marc Andreesen poses that question on his blog. While the rest of us might just wonder and move on, Marc then posed the question to two attorneys at Howard Rice Nemerovsky.
Their analysis is thorough and quite interesting. It walks through scenarios for both a tender offer and a proxy fight. They note that, although Yahoo has a poison pill, it's not something that the Delaware courts couldn't easily overturn. More interesting (to me, anyway) is their analysis of a potential proxy fight. They point out that, unlike many companies, whose directors serve staggered terms, Yahoo's entire board of directors stands for reelection each year. According to the post:
In retrospect, this was not a good idea -- whoever set this up at Yahoo made a serious mistake. In a proxy fight with a staggered board, target management can lose a proxy fight and still control two-thirds of the board. In Yahoo's case, if Microsoft wins one proxy fight, it takes out the entire Yahoo board.
This post is a must-read for those interested in MSFT-YHOO or anyone who wants to see why hostile takeovers are now becoming common in the technology space.
For a take on how it should play out, Paul Kedrosky suggests Microsoft fire Steve Ballmer and hire SuperNanny to clean up his mess.
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