Showdown Today Over Yahoo Vote on Microsoft's Bid

Feb. 11, 2008 — -- Yahoo's board is expected to reject that offer Monday, according to reports by the Associated Press and The Wall Street Journal quoting an unnamed source. USA TODAY could not confirm those reports.

Ironfire President Eric Jackson has organized a group of 100 dissident shareholders who collectively own more than 2 million shares and have agreed to vote as a bloc to support the buyout offer.

Jackson is reaching out to other Yahoo shareholders (http://breakoutperformance.blogspot.com), as well. "We'll tender our shares to the highest bidder," he says. "We don't trust Yahoo's board to negotiate on our behalf."

Jackson says it would be "ludicrous" to turn down Microsoft and says Yahoo's outlook has only worsened under CEO Jerry Yang, who replaced Semel in 2007.

"He runs it as if it's a private company, taking slow, incremental steps," he says. "He doesn't realize his approach is what lost the confidence of Wall Street and put Yahoo in play." Yahoo declined to comment.

Greg Sterling, an analyst with Sterling Market Intelligence, says a Yahoo rejection would be an attempt to get Microsoft to sweeten its offer, a prospect he calls "highly unlikely."

Microsoft has proposed paying $31 a share, a 62.7% premium over Yahoo's $19.05 closing price when Microsoft made the offer on Feb. 1. Yahoo stock closed Friday at $29.20.

"There is no credible alternative to this offer," says Sterling. "I don't see Yahoo retaining its independence unless someone else comes forward, and that hasn't happened."