Yahoo calls Microsoft bid an unwanted distraction

 

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By Reuters

Posted on 28 Feb 2008 at 08:18

Yahoo has faced "significant distraction" from Microsoft's unsolicited takeover bid, the company has warned in its annual report.

The Silicon Valley web pioneer claims that Microsoft's cash-and-stock deal, now valued at $41.6 billion (£21 billion), may continue to prove a distraction for the company and its management.

The company says Microsoft's bid had the potential to unnerve business and advertising partners and to make it difficult to retain or hire talent.

Earlier this month, Yahoo's board of directors rebuffed Microsoft's offer. Microsoft has responded by saying its offer is "full and fair" and has raised the prospect of a campaign to elect a rival slate of directors that would back its offer.

"The review and consideration of the Microsoft proposal (and any alternate proposals) have been, and may continue to be, a significant distraction for our management and employees," the company claims in its report to the SEC.

Consideration of these proposals "have required, and may continue to require, the expenditure of significant time and resources by us," Yahoo claims.

Yahoo also says in the filing that it faces seven shareholder lawsuits over its handling of Microsoft's buyout proposal. "We do not believe, based on current knowledge, that any of the foregoing legal proceedings or claims are likely to have a material adverse effect on our financial position," Yahoo adds.