Yahoo Looks at New Way to Survive

As it scrambles to avoid defeat in its battle with Microsoft, Yahoo may try to put a little more time on the clock.
Microsoft, whose offer for Yahoo is now worth $41.2 billion, was preparing to escalate its takeover fight by starting a proxy contest next week. But in an effort to delay that move, Yahoo is considering several options, including a plan to postpone its annual meeting, people close to the company said on Tuesday.
The maneuver comes as Yahoo has stepped up merger and joint venture talks with AOL, a unit of Time Warner, these people said.
Microsoft had been preparing to nominate a slate of directors to the board of Yahoo by next Thursday, the deadline for mounting a proxy contest. If Yahoo moves back that deadline back or postpones its meeting, something it could announce as early as this week, the company could buy time to seek out and evaluating alternatives.
Under the laws of Delaware, where Yahoo is incorporated, a public company cannot go more than 13 months without holding an annual meeting. Yahoo held its annual meeting last year on June 12, and has not yet set a date for this year's meeting.
The delay could leave room for Microsoft to reach a negotiated, friendly deal with Yahoo, which would be made much more difficult if Microsoft decided it needed to pursue the proxy contest. On the other hand, Yahoo's continued maneuvering might just harden Microsoft's resolve.
Yahoo's investors could take the view that by postponing the meeting the company is disenfranchising its shareholders. The move could lead to lawsuits from Microsoft or from Yahoo shareholders.