Yahoo says the Microsoft takeover bid may harm its ability to hire and retain employees.
Yahoo executives are worried that doubts about the company's future created by Microsoft's multibillion dollar bid for the Web portal will cause their top talent to head for the exit.
The bid, valued at more than $40 billion, has "created uncertainty for our employees and this uncertainty may adversely affect our ability to retain key employees and to hire new talent," Yahoo said in an annual report filed Wednesday with the Securities and Exchange Commission.
But Yahoo is fighting back.
In an effort to reassure workers, the company recently introduced an enhanced severance program. Under the plan, Yahoo employees who are axed within two years of "a change in control" of the company will receive between four months and two years of regular pay. The package also includes reimbursement for the cost outplacement services for up to two years, extended medical benefits. and accelerated vesting of stock options.
Yahoo is worried about more than just employee defections, however.
The annual report said Microsoft's bid could give customers and partners second thoughts about doing business with Yahoo. The proposal may "create uncertainty for current and potential publishers, advertisers and other business partners, which may cause them to terminate, or not renew or enter into, arrangements with us," said Yahoo.
Yahoo also warned that Microsoft's offer has created a "significant distraction" for its management, and added that the bid has lead to at least seven lawsuits against the company filed by shareholders who want Yahoo to accept the deal.
Yahoo's board of directors has publicly rejected Microsoft's $31 per share offer, insisting it "substantially undervalues" the company.
Prospects for a drawn out battle for control of Yahoo increased when Microsoft, in a regulatory filing of its own, said that its executives should now be viewed as "participants in the solicitation of proxies" with respect to the Yahoo deal.
Microsoft may attempt to convince enough Yahoo shareholders to vote for a new, merger-friendly board at Yahoo's next annual meeting -- most likely in May.
[Interop ITX 2017] State Of DevOps ReportThe DevOps movement brings application development and infrastructure operations together to increase efficiency and deploy applications more quickly. But embracing DevOps means making significant cultural, organizational, and technological changes. This research report will examine how and why IT organizations are adopting DevOps methodologies, the effects on their staff and processes, and the tools they are utilizing for the best results.
2017 State of IT ReportIn today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.