Rather than raise its $44.6 billion hostile takeover bid, Microsoft will start a proxy fight at Yahoo, with an eye to nominating a slate of directors for the board by mid-March. The hardball tactic will cost less than upping the bid—$20 million or $30 million will pay a proxy solicitor and buy shareholder mailers—but it comes with real downsides, the New York Times reports.
Microsoft would have preferred a friendly takeover, because bitterness could provoke Yahoo employees to quit en masse. But the software giant has made it clear it will stop at nothing—and the Yahoo board elects all of its directors at once, making it a ripe target. Microsoft’s stock has sunk 12.8% since the offer was revealed 2 weeks ago.