Darren Bagwell, who helps manage $60 billion at Thrivent Asset Management, is frustrated with Yahoo! Inc Chief Executive Officer Jerry Yang, the man he says is standing in the way of a payout from Microsoft Corp.
“I ran out of patience a long time ago,” said Bagwell, whose Appleton, Wisconsin-based firm owned 1.5 million Yahoo shares as of December 31. “The majority of investors would prefer to see them trying to reach an agreement with Microsoft as opposed to looking for ways to fight them off.”
Intense deliberations
Yahoo has deliberated for almost a month over how to counter Microsoft’s $44.6 billion takeover offer and is now drawing lawsuits from shareholders including two Detroit retirement systems. After rejecting the purchase and talking with companies including News Corp., Yang has yet to reveal a strategy for Yahoo to remain independent and compete with bigger rival Google Inc.
Some investors say Yahoo's board is more focused on scaring off Microsoft than providing the best return. Yahoo last week adopted employee severance plans that would pay as much as two years of salary to fend off the $31-a-share bid.
“If the deal goes south, the stock is going south as well,” said Larry Haverty, who manages Gabelli Global Multimedia Trust Fund at Gamco Investors Inc. in Rye, New York, which owns Yahoo shares. Gamco managed $31.6 billion as of September 30. “With Jerry Yang running the company, the value is $20 a share.”
Yahoo spokeswoman Tracy Schmaler declined to comment and said the board is considering its options and committed to pursuing the best action for shareholders. Last week, the Police & Fire Retirement System of Detroit sued Yahoo, claiming Yahoo is “pursuing all manner of value-destructive third party deals” while resisting Microsoft.
“The Yahoo board members have placed personal distaste for Microsoft ahead of shareholder welfare,” the suit said. “The board’s refusal to negotiate with Microsoft evidences an improper purpose to thwart any sale to this particular bidder.” To get the deal moving, Microsoft may have to begin a hostile takeover to unseat the current board, Haverty said. He expects that move will get the board to the table and allow the companies to agree on a price.
