Down in Silicon Valley, things are starting to get nasty in Microsoft's bid to take over Yahoo: the latest move being a plan by Microsoft to nominate its own board of directors, hoping shareholder support of its $31-a-share offer will help it take control of the company. The proxy battle plan, designed to turn the screws on Yahoo's board, makes sense from a cost perspective. Analysts estimate the battle would cost Microsoft just $20 million to $30 million, while each dollar it sweetens its takeover offer adds up to another $1.5 billion.
Meanwhile, Yahoo is fighting back, adopting a rather lush severance plan for workers that, in the case of an acquisition, provides up to two years pay and benefits, accelerated stock and option vesting, and help finding new work. Yahoo's move could backfire.
As Silicon Alley Insider Harry Blodget sees it: Yahoo has just spent whatever money Microsoft has set aside for retention bonuses. "If Jerry [Yang] was counting on the support of Yahoo workers in his effort to block the company's sale to Microsoft, he's now torpedoed that idea," Blodget writes. "Yahoos are now going to welcome Microsoft -- or any other acquirer -- with open arms." With a severance package like that, so would I.
George Parker
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