July 15, 2008
Icahn Accuses Yahoo of Distortion in Microsoft Offer
By From news reports
The investor Carl Icahn said Monday that Yahoo distorted the facts in explaining why directors rejected a proposal for Microsoft to break up the Internet company, urging shareholders to help him oust the board."Refusing the Microsoft offer for the Yahoo search business is also another grave mistake that will be deeply regretted," Icahn said in an e-mailed statement. He also filed a definitive proxy statement Monday seeking to replace Yahoo's nine-member board with his own nominees, including himself.
Yahoo rejected Icahn's breakup proposal Saturday, calling it financially risky and saying it would be "ludicrous" for the board to accept the deal. Yahoo said the proposal gave the company 24 hours to respond.
Icahn said Yahoo would have had more than the 24 hours had it agreed to postpone its Aug. 1 shareholder meeting. Icahn and Microsoft, the world's biggest software maker, were willing to discuss retaining some Yahoo board members, he said, countering Yahoo's claim that its entire board would have been replaced.
"I have yet to see a company distort, omit and twist events and facts in the manner that Yahoo! has done," Icahn said in the statement.
Icahn made the filing with the Securities and Exchange Commission after Yahoo revealed late Saturday that it had spurned Microsoft's latest attempt to buy its online search engine in a joint proposal made with Icahn.
Icahn, who has no experience running an Internet company, would have been in charge of Yahoo's remaining pieces had an agreement to sell the search engine been reached.
"During the next few weeks you will be hearing from us about how these changes can be effectuated and a transaction structured to enhance value for all shareholders," Icahn said in a letter to shareholders filed with the SEC.
Microsoft first offered to buy Yahoo five months ago, but the software maker ultimately walked away from a deal in May after last- ditch efforts to negotiate a mutually acceptable price failed. Icahn started a shareholder rebellion a few weeks later.
Hoping to fend off the revolt, Yahoo's board is now willing to sell the entire company to Microsoft for $47.5 billion, or $33 per share - a price it rejected as too low 10 weeks ago. But Microsoft has said it has no interest in buying Yahoo in its entirety as long as the company's current board is in place.
Icahn said in his filing that he received assurances from Steven Ballmer, the Microsoft chief executive, that Microsoft "would be willing to enter into discussions regarding a transaction immediately" if Icahn's slate was elected in an Aug. 1 vote.
In a letter to Yahoo shareholders, Icahn detailed the terms of the weekend proposal, including a $7.7 billion commitment from Microsoft that consisted of $1 billion for Yahoo's search business, a $3.9 billion tender offer to Yahoo shareholders, and a $2.8 billion loan.
Icahn also said that during a Friday conference call with Yahoo officials and Ballmer to discuss the offer, Yahoo was less interested in the deal than they were in who would be running the company.
"Finally, Steve Ballmer suggested that we not spend the rest of Friday afternoon on corporate governance. 'First, tell us if you like the deal,' he said,'" according to Icahn.
Originally published by Bloomberg, AP, Reuters.
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