This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7254456.stm

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Microsoft steps up Yahoo campaign Microsoft steps up Yahoo campaign
(about 3 hours later)
Microsoft has hired a law firm that specialises in proxy battles in a move which suggests it could try to oust the current board of Yahoo directors. Microsoft has hired a firm that specialises in proxy battles in a move which suggests it could try to oust the current board of Yahoo directors.
The Yahoo board rejected a takeover offer from Microsoft worth more than $40bn (£20.6bn) saying it was too low.The Yahoo board rejected a takeover offer from Microsoft worth more than $40bn (£20.6bn) saying it was too low.
A proxy fight would see Microsoft nominate a group of directors sympathetic to a deal for shareholders to vote on at Yahoo's annual meeting.A proxy fight would see Microsoft nominate a group of directors sympathetic to a deal for shareholders to vote on at Yahoo's annual meeting.
The move would be cheaper than raising its $31-a-share offer, analysts say.The move would be cheaper than raising its $31-a-share offer, analysts say.
Microsoft's offer was 62% above the level at which Yahoo stock was trading when the bid approach was made on 1 February, and Microsoft has called the price "full and fair".Microsoft's offer was 62% above the level at which Yahoo stock was trading when the bid approach was made on 1 February, and Microsoft has called the price "full and fair".
Microsoft is doing the smart thing. It's giving both the carrot and the stick Toan Tran, Morningstar analystMicrosoft is doing the smart thing. It's giving both the carrot and the stick Toan Tran, Morningstar analyst
However, one of Yahoo's biggest shareholders, Bill Miller, an asset manager at Legg Mason, recently said a fair price would be nearer $40 a share.However, one of Yahoo's biggest shareholders, Bill Miller, an asset manager at Legg Mason, recently said a fair price would be nearer $40 a share.
But it is thought that even offering an extra $1 a share would cost Microsoft an additional $1.4bn, while waging a proxy fight could cost between $20m and $30m.But it is thought that even offering an extra $1 a share would cost Microsoft an additional $1.4bn, while waging a proxy fight could cost between $20m and $30m.
"Microsoft is doing the smart thing. It's giving both the carrot and the stick," said Morningstar analyst Toan Tran."Microsoft is doing the smart thing. It's giving both the carrot and the stick," said Morningstar analyst Toan Tran.
"The carrot was the big premium on Yahoo stock and now the stick is the threat of a proxy fight.""The carrot was the big premium on Yahoo stock and now the stick is the threat of a proxy fight."
Aggressive tactics?Aggressive tactics?
A report in the New York Times on Tuesday said that Microsoft could authorise its proxy battle as soon as this week to put pressure on the Yahoo board.A report in the New York Times on Tuesday said that Microsoft could authorise its proxy battle as soon as this week to put pressure on the Yahoo board.
Microsoft would have until a 14 March deadline to put forward its own choice of directors for shareholders to approve.Microsoft would have until a 14 March deadline to put forward its own choice of directors for shareholders to approve.
Microsoft declined to comment on the report.Microsoft declined to comment on the report.
But law firm Innisfree M&A, which specialises in corporate actions, confirmed that it had been hired by Microsoft. But Innisfree M&A Incorporated, which specialises in corporate actions, confirmed that it had been hired by Microsoft.
Separately, Yahoo has put in place severance benefits for employees who are made redundant if the company is sold within two years.Separately, Yahoo has put in place severance benefits for employees who are made redundant if the company is sold within two years.
Details in a securities filing show that they include top executives getting two years worth of salary, while all staff will receive at least four months.Details in a securities filing show that they include top executives getting two years worth of salary, while all staff will receive at least four months.
Some analysts believe the move is aimed at winning round rank-and-file employees and fuel an exodus of talent if Microsoft succeed in a hostile quest for Yahoo.Some analysts believe the move is aimed at winning round rank-and-file employees and fuel an exodus of talent if Microsoft succeed in a hostile quest for Yahoo.