Yahoo seeks to block Microsoft

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As it scrambles to avoid defeat in its battle with Microsoft, Yahoo is trying 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 said Wednesday that it was extending the deadline for nominating directors until 10 days after the announcement of a date for its annual meeting.

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. In its announcement on Wednesday, Yahoo said it was seeking more time to consider alternatives.

“As the company has not yet announced the date of this year’s annual meeting, the amendment will give stockholders who want to nominate one or more directors, including Microsoft Corporation, more time to do so,” the company said. “The amendment does not preclude any party from nominating one or more directors at any time prior to the new deadline.”

It gave no indication of when the annual meeting might be held.

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.

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.

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