Icahn fires off scathing letter to Yahoo directors

Carl Icahn has put in writing the wrath he expressed to a newspaper Tuesday regarding unsealed court documents that allege Yahoo leaders failed to protect shareholders' best interests by actively trying to sabotage Microsoft's acquisition bid.

In a letter sent Wednesday to Yahoo Chairman Roy Bostock, Icahn blasted the board and co-founder and CEO Jerry Yang over their alleged maneuvers to scare away Microsoft from pursuing its unsolicited acquisition bid, as recounted in court documents unsealed Monday.

"I have constantly complained about how far CEOs and boards will go in order to retain their jobs, yet even I am amazed at the length Jerry Yang and the Yahoo board have gone to in order to entrench their positions and keep shareholders from deciding if they wished to sell to Microsoft," Icahn wrote.

Yahoo didn't immediately reply to a request for comment.

As he told The Wall Street Journal on Tuesday, Icahn reiterated in his letter his belief that Microsoft will not return to the negotiating table unless the current board and Yang have left Yahoo.

"Therefore, the best chance to bring Microsoft and Yahoo together is to replace Yang and the current Yahoo board with a board that will negotiate in good faith with Microsoft and in whom Microsoft will have trust to operate the company during the long period between signing and closing," Icahn wrote.

Icahn, who has nominated a slate of candidates to replace Yahoo's board at the company's shareholders meeting in August, recounted in his letter some of the most juicy allegations in the complaint.

For example, Icahn said he was horrified by Yahoo's adoption of an extremely costly severance plan for all Yahoo employees that would grant them generous benefits for resigning if the company is acquired and that could have cost Microsoft more than US$2 billion on top of the acquisition price.

"Until now I naively believed that self-destructive doomsday machines were fictional devices found only in James Bond movies. I never believed that anyone would actually create and activate one in real life. I guess I never knew about Yang and the Yahoo Board," he wrote.

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