Wednesday, March 5, 2008

Yahoo buys time to handle Microsoft bid

Slumping Internet pioneer Yahoo on Wednesday postponed a key deadline in a looming battle with spurned suitor Microsoft, hoping to gain more wiggle room as it tries to escape a takeover.

The Sunnyvale-based company's maneuver means that March 14 is no longer the deadline for Microsoft to nominate a slate of candidates to replace Yahoo's current board - the 10 directors who rejected the world's largest software maker's initial takeover offer of $44.6 billion.

Microsoft had already signaled it was prepared to oust the board if Yahoo didn't come to the negotiating table before March 14.

Yahoo hasn't offered a new nominating deadline. It will be set once Yahoo announces the date of its annual shareholders meeting. Microsoft will have up to 10 days after the public notice to nominate directors and begin what's known as a "proxy" battle.

"Our objective here is to enable our board to continue to explore all of its strategic alternatives for maximizing value for stockholders without the distraction of a proxy contest," Yahoo Chief Executive Jerry Yang and Chairman Roy Bostock wrote in an e-mail sent to the company's employees.

Microsoft didn't immediately respond to requests for comment.

Yahoo could wait a few more months before announcing its annual meeting, which can be held as late as July 12 this year. But Yahoo is more likely to set the date within the next week or two, according to a person familiar with the company's thinking. The person wasn't authorized to speak publicly.

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