Yahoo is being sued by the Detroit Police and Fire retirement system and general retirement system, as well as “all other similarly situated public shareholders,” over its rebuff of Microsoft.
The new lawsuit follows a similar lawsuit filed February 13 by the Wayne County Employee’s Retirement System of Michigan.
The lawsuit claims that Yahoo’s board is pursuing value-destructive third-party deals in an effort to fight off Microsoft. The suit asks the court to block the Yahoo board from completing any such transaction with third parties and to force it to reconsider Microsoft’s offer. It also asks the court to block Yahoo from implementing defensive measures “that would render the company unattractive to potential buyers.”
“Yahoo’s directors cannot ‘just say no’ indefinitely to legitimate acquisition offers….Likewise, Yahoo’s directors cannot pursue transactions that do not require shareholder approval for the primary purpose of making Yahoo unattractive to Microsoft.”
“Regardless of their emotional ties to Yahoo and their desire to retain their positions as directors at the company, the Yahoo directors owe fiduciary duties to Yahoo and its shareholders.”
It was not clear when the case may be heard by the Delaware Chancery Court.