Yahoo says faces 7 lawsuits over Microsoft bid

NEW YORK (Reuters) - Yahoo Inc said it faces seven shareholder lawsuits over its handling of Microsoft Corp's unsolicited $42 billion (21.2 billion pound) buyout proposal and that dealing with the takeover bid has created a distraction for its management.

Four of the lawsuits were filed in California Superior Court and three were filed in Delaware Chancery Court, Yahoo said on Wednesday in a filing with the U.S. Securities and Exchange Commission.

"We do not believe, based on current knowledge, that any of the foregoing legal proceedings or claims are likely to have a material adverse effect on our financial position," Yahoo said.

Yahoo has rebuffed Microsoft's offer, which represented a 62 percent premium of its share price when it was announced on February 1, saying it significantly undervalued the company's audience, advertising platform and investment holdings.

The company called the Microsoft bid a "significant distraction" for management and employees, saying it had the potential to unnerve business and advertising partners and to make it difficult to retain or hire talent.

(Reporting by Michele Gershberg; Editing by Toni Reinhold)