Yahoo! Inc., has been exploring their various acquisition and strategic content development options for months and now the company is being sued by a group of shareholders who simply want the company to grab the best possible price for the internet search and content development firm.
The lawsuit, filed on Dec. 1 in a Delaware Chancery Court by M&C Partners III claims that company co-founder Jerry Yang has created bidding rules that would make it nearly impossible to acquire the company and then replace the organizations directors.
According to the lawsuit Yahoo:
“Has adopted a confidentiality agreement” for bidders, prohibiting them from talking with other bidders and to “confine themselves to a bid for only a minority stake.”
M&C claims that the no cross-talk provision:
“Constitutes an unreasonable anti-takeover device” and “tilts the playing field” to give Yang a “disproportionate influence” over company affairs.
At the hard of the lawsuit is Yang’s attempt to provide only a minority stake in the company, a stake M&C says is “unlawful and unenforceable.”
The lawsuit comes at a time when Alibaba Group Holding Ltd, Softbank Corp, Blackstone Group LP and Bain Capital LLC are said to be gearing up for a takeover bid.
The case is filed under: M&C Partners III v. Jerry Yang and Yahoo! Inc. (YHOO), CA7082, Delaware Chancery Court (Wilmington).
Yahoo spokespeople have not returned calls for comment at this time.