Two Detroit pension funds have filed a shareholders lawsuit against Yahoo in the Delaware Chancery Court, according to reports Friday.
The lawsuit, filed by the a Detroit public employees pension fund and a Detroit firefighters and police pension fund, accused the Internet search pioneer of stonewalling Microsoft's unsolicited buyout offer, initially valued at $44.6 billion on February 1.
"Yahoo's directors cannot 'just say no' indefinitely to legitimate acquisition offers when the effect of that decision is to deny shareholder choice in the face of non-coercive and economically beneficial bid--especially where, as here, the bid may yet be improved through negotiations," the lawsuit stated, according to MarketWatch.
Earlier this month, the Wayne County Employees Retirement System sued Yahoo in a Michigan court.
Separately, Microsoft on Friday released a copy of an e-mail that Windows and Windows Live unit head Kevin Johnson sent to his staff.
In the memo, Johnson repeats Microsoft's language that it believes its offer is "full and fair."
"While Yahoo has issued a press release rejecting our proposal, we continue to believe we have a full and fair proposal on the table," Johnson said. "We look forward to a constructive dialogue with Yahoo!'s Board, management, shareholders, and employees on the value of this combination and its strategic and financial merits."
Johnson also addresses many of the key questions that have been raised about the merger, although he does so in largely general terms, sidestepping the question of which Microsoft and which Yahoo products would be kept once a deal was completed.
"Both Microsoft and Yahoo have great brands and technologies," he wrote. "Yahoo has a very strong consumer brand and we are committed to build on the Yahoo brand as a major part of the combined products and services we deliver to customers."
Kevin Johnson
But, he repeated the company line that "it is premature to say which aspects of the brands and technologies we would use in our combined offerings," saying such decisions would be made by an integration team made up of leaders from both companies.
On the open source vs. Windows question, Johnson writes that "Services we've acquired over the years have been based on both Windows and open source technologies.
"Although Windows is our strategic platform and in some cases the teams ultimately migrated their products to Windows for a variety of reasons, in other cases we have prioritized continuity and have used open interoperability mechanisms to achieve effective systems integration," Johnson said. "Yahoo has made significant investments in both its skills and technologies, so we would work closely with Yahoo engineers to make pragmatic platform and integration methodology decisions."
He also briefly addressed the issue of competing corporate cultures.
"Some aspects of the two cultures will naturally merge quickly and some will remain unique in the near-term and merge more slowly over time," he said. "At Microsoft today, we have a corporate culture, but individual teams develop, nurture, and retain a culture of their own as well. The culture of the combined entity will be shaped by individuals and teams from both Yahoo and Microsoft."
Johnson had downplayed the notion of cultural differences in an interview the day the deal was announced.
