A Delaware judge has denied a request to hold a trial that could have complicated Yahoo Inc.'s efforts to thwart a shareholder rebellion led by activist investor Carl Icahn.
The ruling, issued late Monday by Delaware Chancery Court Judge William Chandler, represents a setback for Yahoo shareholders suing the Internet pioneer for its rejection of a $47.5 billion takeover offer from Microsoft Corp.
Lawyers for the shareholders were hoping to secure a July trial date to contest the legality of an employee severance plan that would have driven up the potential cost of a Microsoft takeover by between $462 million and $2.7 billion, according to Yahoo records handed over during the lawsuit.
Had it been held next month, the trial could have provided more fodder for Icahn to use in his campaign to replace Yahoo's current board at the Sunnyvale-based company's annual meeting Aug. 1.
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In a two-page ruling, Chandler said the shareholders hadn't shown “good cause” for an expedited trial date. He said he would rule on Yahoo's motion to dismiss the lawsuit before the company's Aug. 1 annual meeting.
Yahoo last week ended talks with Microsoft and forged an online advertising partnership with Google Inc. that is supposed to boost its annual revenue by about $800 million.
Those developments have left Yahoo's stock price about 30 percent below Microsoft's last takeover offer of $33 per share, which was withdrawn May 3.
Yahoo shares fell 29 cents, or 1.2 percent, Tuesday to finish at $23.25.