Do You, uh, Ya-sue?
And so it begins. Two Detroit-based pension funds have filed suit against Yahoo (YHOO) and its board, accusing them of placing “personal distaste for Microsoft (MSFT) ahead of shareholder welfare.”
“Yahoo’s directors cannot ‘just say no’ indefinitely to legitimate acquisition offers when the effect of that decision is to deny shareholder choice in the face of [a] noncoercive and economically beneficial bid–especially where, as here, the bid may yet be improved through negotiations,” the suit by Detroit’s Police and Fire Retirement System and General Retirement System argues. “The Yahoo board, in its desperation to pull off a ‘Just say no to Microsoft’ defense, is fighting off a noncoercive 62% premium offer by pursuing all manner of value-destructive third-party deals.”
This is the second shareholder suit to be filed in relation to Microsoft’s bid for Yahoo. Earlier this month, the Wayne County Employees Retirement System sued Yahoo in a Michigan court in the hopes of forcing it to consider Microsoft’s offer.