Yahoo trial looms amid takeover attempt

Yahoo may have to defend its response to Microsoft's takeover attempt in a trial that could sway the outcome of the internet pioneer's August showdown with investor activist Carl Icahn, an Associated Press report said.

The legal drama will unfold next month if a Delaware judge grants a request made by attorneys for Yahoo shareholders, the report said.

The disgruntled shareholders are seeking to cancel an employee severance plan that Yahoo's board adopted shortly after Microsoft made its initial bid of €28.8 billion (US$44.6 billion), or €20 (US$31) per share.

In court papers, the shareholder attorneys argue that the legality of the severance plan should be determined in a trial before an August 1 election pitting Yahoo's current board against Icahn and eight other candidates nominated by the billionaire.

Yahoo had no immediate comment, but legal and corporate-governance experts expect the company to vigorously oppose the motion for a July trial date.

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