Yahoo swallows "poison pill"

 

Gallery

By Reuters

Posted on 11 Dec 2008 at 08:51

Yahoo has revised the "posion pill" employee severance plan it adopted to ward off a hostile bid from Microsoft.

The new plan states that any Yahoo employee laid off within a year after the acquisition of Yahoo would be eligible for severance, a reduction from the two years in the original provision.

The plan also states that the election of a new board of directors is not considered a change in ownership, nor is the sale of the company's search business. It also clarifies the circumstances for firing for "good reason," and requires binding arbitration for disputes.

"We believe the settlement is in the best interests of our company and the shareholders and the settlement allows the company to avoid costly and distracting litigation," says a Yahoo spokeswoman.

The settlement in Delaware's Court of Chancery stemmed from a class action by the police and fire retirement system of Detroit and others.

Ivory Investment Management LP, which owns 1.5% of Yahoo's stock, has urged the company to sell its search business to Microsoft, saying such a deal could more than double Yahoo's value.