Icahn said to be mulling Yahoo proxy fight
Billionaire investor Carl
Icahn is reportedly mulling a proxy fight against Yahoo's current board
members in order to pressure the company to re-establish merger
negotiations with Microsoft.
Icahn has bought as many as 50 million Yahoo shares since Microsoft walked
away from the deal, according to reports Tuesday in the Wall Street Journal
and on CNBC,
which both quoted anonymous sources familiar with the situation.
However, Microsoft hasn't indicated to Icahn that it would return to the negotiating
table, and Icahn hasn't decided whether he will go through with the proxy fight,
the reports said.
Yahoo investors have until Thursday to nominate candidates to the board, whose
10 incumbent directors are all up for re-election this year when Yahoo holds
its shareholders' meeting in July. Separately from Icahn's plans, other large
investors are considering getting into the fray, the Journal reported.
Icahn did not immediately respond to a request for comment, and Microsoft and
Yahoo declined to comment.
The news was first reported by CNBC in the mid-afternoon, helping to give a
lift to Yahoo's stock, which closed up 5 percent to US$26.56 on the Nasdaq.
Microsoft announced its $44.6 billion bid for Yahoo on Feb. 1 but walked away
from the deal three months later, on May 3, saying the companies couldn't agree
on a price. Microsoft's last offer was for $33 per share, or about $5 billion
more than its original offer, but Yahoo wanted $37 per share.
Since then, various big Yahoo shareholders have expressed their displeasure
with Yahoo's board and management for, in their view, not negotiating in good
faith with Microsoft and causing the talks to collapse. Yahoo formally rejected
Microsoft's original offer on Feb. 11, saying it undervalued the company.
On Monday, May 5, the first day of trading after Microsoft's offer withdrawal,
Yahoo's stock lost significant value, closing down 15 percent at $24.37, after
dropping as low as $22.97 during the day.
Last week, Yahoo cofounder and CEO Jerry Yang and other top Yahoo executives
tried to shift the blame to Microsoft, alleging that the $33-per-share offer
was never put in writing and that Microsoft unexpectedly walked away at a time
when Yahoo was still open to negotiating.
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