July 21, 2008, 9:07 AM — Yahoo has reached an agreement to end a proxy fight with investor Carl Icahn, who will take a seat on the company's board after the annual stockholders' meeting, Yahoo said Monday.
As part of the settlement agreement Icahn, who owns 4.98 percent of Yahoo common stock, has agreed to withdraw his nominees and support those of the board at the annual meeting on Aug. 1. Eight members from the current board of directors will be up for re-election, including CEO Jerry Yang.
The Yahoo board will be expanded to 11 members, including Icahn and two others from his list. With Icahn now to have a seat on the board, his list includes eight remaining nominees along with Jonathan Miller, currently a partner in Velocity Interactive Group and former Chairman and CEO of AOL, according to a statement from Yahoo.
Icahn had been trying to wrest control of the Yahoo board to force a sale of all or part of it to Microsoft. Yahoo has rebuffed Microsoft's offers and according to published reports Microsoft is now in talks with Time Warner to possibly buy its AOL business. After Yahoo investor Legg Mason said last week that it would support the current Yahoo board, it appeared likely that Icahn's efforts would not prevail. Legg Mason owns 4.4 percent of Yahoo shares.
The agreement between Yahoo and Icahn serves the best interest of stockholders, Company Chairman Roy Bostock said in a statement, and he now looks forward to working productively with Icahn and the other new members of the board.
For his part, Icahn said in the same statement issued by Yahoo that he is pleased with the settlement, but he still contends that selling all of the company or its search business "must be given full consideration."
As part of the agreement, that issue, as well as any strategy for a "transaction," will be discussed by the full board, which also pleases Icahn, according to the statement.