Yahoo has published a response to news that investor Carl Icahn and Microsoft are apparently planning to oust Yahoo’s current board of directors and replace co-founder Jerry Yang in his role as CEO. The company acted surprised and noted that Yahoo!’s independent directors and management approached Microsoft CEO Steve Ballmer about just such a transaction as recently as June, “only to be told that Microsoft was no longer interested even in the price range which they had previously proposed.”

Yahoo believes that Icahn and Ballmer “have teamed up in an apparent effort to force Yahoo into selling to Microsoft its Search business at a price to be determined in a future ‘negotiation’ between Mr. Icahn’s directors and Microsoft’s management,” which Yahoo believes would not be in the interest of Yahoo’s stockholders. Instead, Yahoo said that it “invites” Microsoft to make a proposal immediately, if the company is “really” interested in purchasing Yahoo: “And if Mr. Icahn has an actual plan for Yahoo! beyond hoping that Microsoft might actually consummate a deal which they have repeatedly walked away from, we would be very interested in hearing it,” the statement reads.  

We can’t help but note that it appears that Yahoo’s board has not yet noticed that its negotiation position has changed dramatically and the time for making demands may have passed. Icahn and Microsoft could pose a serious threat in a proxy fight that would replace the current board with a board that would simply prepare the sale of Yahoo to Microsoft. Now that Microsoft has signaled that it is still interested in buying Yahoo, presumably at much more favorable conditions than what was on the table before, and Carl Icahn acting as the facilitator of a potential deal, Yahoo’s board may have to come up with more convincing phrases than simply stating that such a deal would not be in the best interest of shareholders.  

Idiots

Jul 08, 2008 08:53     

Well it's their own fault really, isn't it? Here they were slamming Microsoft with demands after it's (very)generous offer, which was quite a lot of money. What do they do? Force even more demands in their face, thinking they have the world by the tail, unfortunately that arrogance and pride backfired, as it often does, and now they're back to making demands? Wolfgang is right, if they want to make this happen on their terms, they need to rephrase these "demands".

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Freedom vs Dictator

Jul 08, 2008 09:35     

As a past victim of Carl Icahn and Boone Pickens, I have not respect for them. They rush in with their buckets of money and force companies to do their bidding, just to make a quick buck. The shareholders get only a short term gain, then loose big time in the long run. The employees end up paying the real price (layoffs, pay cuts) in the long run.
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