On Monday, February 11th, and Thursday, February 21st, two related class actions were filed in the Court of Chancery against the directors of Yahoo! for breach of fiduciary duties in connection with the offer by Microsoft, made on February 1st, to acquire Yahoo! for $31 per share, a price which reflected a 62 percent premium above the Yahoo! share value at the close of the day prior to the offer. The first complaint is Wayne County Employees’ Retirement Sys. et al. v. Yahoo!, Inc., Court of Chancery C.A. No. 3538, and he second complaint is Police and Fire Retirement System of the City of Detroit et al. v. Yahoo!, Inc., Court of Chancery C.A. No. 3561.
The second complaint alleges that the Yahoo! board members have breached their fiduciary duties by rejecting Microsoft’s value-maximizing offer by refusing to consider and respond to the offer in good faith. The plaintiffs also seek an injunction preventing Yahoo! from initiating any defensive measures and an order compelling Yahoo! to redeem its poison pill and invalidate certain severance plans.
