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Last Updated: Wednesday, 5 March 2008, 17:35 GMT
Yahoo seeks time to stall buy-out
Yahoo signs
Yahoo said the original offer undervalued the firm
Yahoo has extended a deadline for naming board directors, to allow it to find an alternative to Microsoft's unwanted $44.6bn (22.3bn) buy-out bid.

After Yahoo rejected the bid, Microsoft hired a firm specialising in proxy battles, indicating it could try to remove Yahoo's board of directors.

Yahoo said Microsoft could still name directors but the extension let Yahoo's board seek "strategic alternatives".

The original 14 March deadline has been extended to an unspecified date.

It now runs until 10 days after Yahoo sets a date for its annual meeting, which must take place by mid-July.

'Imminent deadline'

A proxy fight would allow Microsoft to nominate directors who were sympathetic to a deal, which shareholders would then vote on at Yahoo's annual meeting.

Yahoo, which has been struggling, rejected the initial offer, saying it undervalued the firm.

The latest move by Yahoo is an indication that it is "probably less receptive to Microsoft than was initially believed", said Jeffrey Lindsay of Sanford Bernstein

"In light of the current circumstances, this change removes an imminent deadline," said Yahoo chief executive Jerry Yang in a filing sent to the US Securities and Exchange Commission.

Yahoo has been seeking links with other media and internet firms that would give it more independence.

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