Yahoo's board may have won the battle to thwart Microsoft's takeover bid, but it could lose the war against enraged shareholders at its rescheduled annual general meeting on 3 July.
In March, Yahoo pushed out the date of its AGM in an attempt to stop Microsoft launching a threatened hostile takeover.
Microsoft walked away from negotiations at the weekend following Yahoo's rejection of an increased offer of $47,5-billion and this, says Associated Press, has spurred one "activist shareholder" into action. Eric Jackson, president of Ironfire Capital, is trying to recruit an alternative slate of directors to present at the AGM.
"We are hoping to turn that (meeting) into 'Independence Day' for Yahoo's shareholders," says Jackson. "It's hard to believe the board could let this happen. I think they completely misconstrued the situation and thought, 'Microsoft is rich, so let's soak them.' They were bluffing all the way and got caught."
Jackson has until 15 May to submit a list of alternate directors and says that he has already approached several "well-known and credible" candidates well-versed in the problems facing Yahoo. Even if he can't come up with suitable candidates, he has vowed to spearhead a campaign urging shareholders to vote against the re-election of Yahoo's current directors.
And his words should not be taken lightly.
Even though Jackson only holds 96 of Yahoo's approximate 1,4-billion shares, he will be remembered for being a key factor in the resignation of Yahoo's previous CEO, Terry Semel. Jackson spent several months leading up to last year's AGM organising an online protest against Semel. It culminated on the day of the meeting where Jackson confronted Semel and asked the CEO if he still had enough "fire in his belly" to do his job.
Semel resigned six days later and was replaced by Jerry Yang.
Jackson is, however, not the only disgruntled Yahoo shareholder taking action against the board. Reuters reports that two of Yahoo's biggest shareholders – the Police & Fire Retirement System and the General Retirement System of the city of Detroit – are planning to expand their complaint against Yang and other members of Yahoo's board, saying they failed to act in the best interest of shareholders by rejecting Microsoft's bid.
Lawyers at Bernstein Litowitz Berger & Grossman LLP representing those funds, say that Yahoo's reported attempts to make deals with other companies, including Google and Time Warner, while in talks with Microsoft indicate that Yang and the board didn't negotiate in good faith.