Microsoft could nominate proxy slate of directors for Yahoo, says report

NEW YORK : Microsoft could make its next move against Yahoo Wednesday with the software giant likely to try and replace Yahoo's board of directors, the Wall Street Journal reported. A Microsoft deadline for the Internet service company to accept its 44.6 billion-dollar (28.5 billion-euro) acquisition offer expired at midnight Saturday, without comment from either side. The two sides have had no formal negotiations since then but Microsoft's next move could come as early as Wednesday, the Journal said, citing people familiar with the matter. One option being considered is nominating a proxy slate of directors that Yahoo shareholders would be asked to vote onto their company's board, replacing current officials. Microsoft has already selected 10 nominees and three alternates, an unnamed source told the newspaper. Such a move "would represent a largely unanticipated middle path for Microsoft between walking away from its bid and pushing forward an aggressive hostile-takeover campaign," the newspaper reported. It would allow the software giant to delay fixing a firm new price on its offer for Yahoo, while preserving the option of going directly to Yahoo shareholders with a hostile takeover bid, the newspaper pointed out. In an open letter to the Yahoo board of directors on April 5, Microsoft chief executive Steve Ballmer gave the Internet pioneer three weeks to accept the 31 dollars-a-share takeover offer or face a proxy fight. Ballmer also warned that any further delays could result in a less attractive offer for Yahoo. But Yahoo's board of directors has said the offer "substantially undervalues" the California firm, insisting it is worth at least 40 dollars a share. Microsoft is eager to merge the two companies' resources to take on Google, which dominates the lucrative Internet search advertising that is expected to grow to 80 billion dollars annually worldwide in the next two years. - AFP /ls