May 5, 2008 9:20 PM PDT

Yahoo sets shareholders meeting for July 3--fireworks anticipated

Posted by Dawn Kawamoto

Yahoo announced late Monday night it will hold its annual shareholders meeting on July 3, setting the time clock ticking for shareholders to nominate any dissident directors within the next 10 days.

Yahoo's decision to set the date for its shareholders meeting comes just days after Microsoft withdrew its unsolicited $33-a-share buyout bid for the Internet search pioneer and on the same day its shares took a beating, in light of the withdrawn bid

As noted in a News.com blog Sunday, a proxy solicitor said Yahoo would be wise to set its shareholders meeting ASAP, because it would trigger a 10-day deadline for any irate shareholders to react and quickly assemble a slate of opposition candidates to run against Yahoo's board of directors at its next annual meeting.

Yahoo's full board of 10 directors seats are coming up for re-election to one-year terms at the next annual shareholders meeting. In March, Yahoo had extended the deadline for shareholders to name opposition candidates, in a move to delay Microsoft from launching a proxy fight with its own slate of opposition candidates.

When Microsoft withdrew its $47 billion bid for Yahoo, Microsoft CEO Steve Ballmer stated in his letter to Yahoo's CEO Jerry Yang that he had no plans of launching a hostile proxy fight to unseat Yahoo's board, or going directly to Yahoo investors with a tender offer.

Although any shareholders who want to run candidates against Yahoo's nominees for the board will be able to put their names forth to Yahoo's corporate secretary by the close of business on May 15, proxy solicitors and attorneys who specialize in mergers and acquisitions say it would be difficult to unseat Yahoo's board with a dissident slate, in absence of also offering a firm buyout bid on the table for shareholders to consider.

The main purpose of unseating Yahoo's entire board would be to remove Yahoo's anti-takeover measure, called a shareholders rights plan, or "poison pill."

So, as a result, it's a case of you can build a slate of dissident directors, but will other investors vote them in without some money on the table? Likely not...