Yahoo makes it harder for investors to launch proxy battles

The Sunnyvale company said it is changing its bylaws so that at next year’s annual shareholder meeting, investors or groups holding at least 3 percent of Yahoo common stock for at least three years would have the easiest path to nominating directors.

New York hedge fund Starboard Value is waging a campaign to overthrow Yahoo’s nine-member board with its own set of candidates that have business operations, media and technology industry experience.

“It makes it harder for smaller investors to not only get access, but also toss out the entire board,” said Patrick Moorhead, president of advisory firm Moor Insights & Strategy.

Shareholders will determine whether Starboard or Yahoo’s nominees will be placed on the board through a voting process held this summer at its annual shareholder meeting.

Starboard is pushing Yahoo to sell its core business and change its leadership team, at a time that Yahoo is struggling to turn around its Internet properties.