Icahn, Yahoo Trade Punches
By Elise Ackerman, San Jose Mercury News, Calif.
Jun. 5–Yahoo Chairman Roy Bostock accused billionaire investor Carl Icahn in a biting letter released Wednesday evening of having no “credible plan” for the Sunnyvale company, as the two sides intensified their battle for control of the Internet icon.
Earlier in the day, Icahn released a letter demanding Yahoo rescind a severance plan he described as “the largest impediment to the Microsoft deal.”
Both Bostock and Icahn are trying to win the backing of shareholders before an election for the board of directors is held at the annual meeting Aug. 1 at the San Jose Fairmont Hotel.
Bostock said Icahn’s letter “seriously misrepresents and manipulates the facts” regarding the severance plan and Yahoo’s negotiations with Microsoft.
“Notably, you accuse us of turning down a $40 per share offer and ‘sabotaging’ a $33 per share offer,” Bostock wrote. “Again, this is patently untrue. Yahoo’s Board of Directors has at all times been focused on maximizing shareholder value.”
Bostock said Yahoo had reached out to Microsoft and met with representatives of the company “many times” in the past several weeks.
“During this period, their message to us and to the markets has been and remains that they are not interested in pursuing a full acquisition of Yahoo.”
Microsoft withdrew its bid May 3. Icahn has been trying to persuade Microsoft and Yahoo to resume negotiations by nominating a slate to replace Yahoo’s board.
In his Wednesday letter to Bostock, Icahn suggested the two sides could easily reach a deal if the “poison pill severance plan” was rescinded, because it would free up more than $2 billion, which could be added to the bid.
“It is time for you to stop misleading your shareholders with respect to Microsoft,” he wrote.
But what if Microsoft does not want to buy Yahoo?
“Conspicuously absent from your letter is any credible plan for Yahoo other than a repetition of your insistence that the company should sell itself to Microsoft,” Bostock countered. “Indeed, your stated view that ‘the only way to salvage Yahoo in the long if not short run is to merge with Microsoft’ demonstrates that you have no other plan and causes one to wonder what exactly would happen to our company if you and your nominees were to take control of Yahoo.”
Separately, Reuters reported that Microsoft and Yahoo are closing in on a deal that involves Microsoft buying Yahoo’s search business and taking a minority stake in its media assets. Under this scenario, Yahoo would sell its stakes in Asian Internet companies.
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