Some thoughts of Icahn
Icahn
Microsoft ended up distancing itself from Icahn, and other large institutional shareholders like Legg Mason?s Bill Miller decided that ganging up with Icahn would be a bad idea. And Yahoo began soliciting votes for its current board members on its homepage. 3
Yahoo and Icahn negotiated this settlement over the weekend to avoid a nasty proxy fight at the shareholder meeting that would have seen Icahn try to replace Yahoo’s entire board of directors — including chief executive Jerry Yang — with people of his own choosing. Icahn owns over 68 million shares of Yahoo stock, right around 5 percent of the company. 2
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More to the point, Icahn says that his new board will immediately seek to oust Yang and replace him with a CEO with more experience, Icahn writes. Then he?ll set his sights on the Yahoo board, with the intent to restructure it to okay the Microsoft deal. 6
There will be no fireworks on display at the Yahoo shareholder meeting on August 1. Or at least, they won’t be as bright. Billionaire investor Carl Icahn has reached an agreement with Yahoo to drop his pursuit of a hostile takeover of the company. In return, Icahn will get a seat of his own on Yahoo’s board of directors as well as the potential for two other seats for the board replacement members he had chosen. 1
Icahn has told associates that he bought as many as 50 million shares of Yahoo — worth more than $1 billion — in anticipation of pressing for seats on its board. He has also inquired at Microsoft, through various friends, whether he could help bring that company back to the negotiating table, these people said. He has received little encouragement, these people said, because Microsoft has insisted that it has ”moved on.” 5
Many Yahoo shareholders, frustrated at the company for pushing Microsoft away, would appear receptive to a dissident slate of directors. In recent days, Yahoo’s board has received a deluge of letters from Yahoo shareholders criticizing the company’s tactics during the negotiations with Microsoft. 7
Reportedly, Microsoft CEO Steve Ballmer has been engaged in talks with Icahn over the past several weeks. In an official statement from Microsoft the company announced that it would be interested in pursuing Yahoo again if Icahn is successful in his bid to overhaul Yahoo’s board of directors ? Critics say that Chang should have jumped all over the $31 per share offer for Yahoo, especially since the stock has dropped significantly in the weeks following the collapse of the deal. That was $40 billion on the table that Yang walked away from, and Icahn and a big investors have a big problem with that. 4
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