The SEC filing for the Google-Yahoo search deal has one interesting tidbit: An escape clause designed specifically with Microsoft, Time Warner, or News Corp in mind.
Either Yahoo or Google can spike the deal if there’s a “change in control” of the other company. Broad generic definition: Someone else controls 50% or more of its voting securities. But the language is tweaked to account for Microsoft (MSFT), Time Warner (TWX), or News Corp. (NWS): If any of those buyers ends up with 35% of Yahoo, Google can walk away.
And Google is clearly thinking about the prospects of Microsoft coming back to pick at Yahoo’s carcass: It’s gone ahead and inserted even more specific language to address a possible Redmond raid. If Microsoft acquires more than 15% of the voting power, 5% of the total equity, or 1% of the company’s annual revenues, it’s considered a change in control.
The escape hatches theoretically apply to both parties, but obviously there’s only one practical application here. And to reinforce that, there’s this clause: If Yahoo is acquired, Google can receive up to $250 million as a kill fee. That certainly won’t be enough to keep Ballmer at bay, though.