Yahoo, Icahn: They Say Potato, He Says Potahto
ADOTAS – Another day, another public showdown for Yahoo. Many charges and demands were repeated (again) but some new ground was trod. This morning, billionaire and activist shareholder Carl Icahn, issued a terse missive to the Internet pioneer in which he dismissed Yahoo’s claim that Microsoft is no longer interested in purchasing the company.
Icahn went on to demand that Yahoo offer itself on a silver platter to the software giant for $34.375 a share (sans a pricey severance plan) – higher than Microsoft’s most recent offer of $33, but much lower overall without the severance deal included in the package.
“While you keep repeating that the severance plan was in the ‘best interests of shareholders’, you neglect to mention that the financial cost of the plan could be immense,” Icahn wrote in a letter to Yahoo’s chairman, Roy Bostock. “The documents obtained during discovery and released in the shareholder complaint show that Yahoo! estimates the maximum change in control severance expenses to be a staggering $2.4 billion…”
Icahn also outlined his plan if he succeeds in taking over the board at their next meeting (the first two points have been made over and over. and over. The next three are newbies):
- First, I would work to have the board replace your “poison pill” severance plan with an acceptable alternative.
- Second, I intend to ask our new board to hire a talented and experienced CEO (attempting to replicate Google’s success with Eric Schmidt) to replace Jerry Yang and return Jerry to his role as “Chief Yahoo”. Indeed, it was much speculated that Jerry would serve in the CEO role temporarily until a permanent CEO was hired after the board asked Terry Semel to resign.
- Third, I intend to ask our new board to inform Microsoft that unless any alternative transaction can insure a $33 or higher stock price (of which I am skeptical) all talks of alternative transactions are over.
- Fourth, I will ask our new board to offer publicly to sell Yahoo! To Microsoft in a friendly and cooperative transaction.
- Fifth, to the extent Microsoft does not want to make a proposal, I will ask our new board do a deal on search with Google, but only if it contains termination provisions that would in no way impede a subsequent acquisition by Microsoft.
Yahoo responded swiftly (and briefly) with a public missive of its own. Here it is, in its entirety:
“Leaving aside Mr. Icahn’s inaccurate interpretation of our retention plan, we again note that he has no credible plan to operate Yahoo!. We believe that Mr. Icahn’s suggestion that we cancel our retention plan would have a destabilizing impact on Yahoo! and would clearly not be in the best interests of our shareholders. Furthermore, his suggestion that we put out a price publicly to see if Microsoft will alter its stated position is ill-advised. As we have stated numerous times publicly and privately, we are open to any transaction including a sale to Microsoft if it is in the best interests of shareholders.”
So Icahn unfurled a few new stocks of ammo, but Yahoo is launching the same old grenades, insisting for the umpteenth time, that they are open to a deal — if it’s in the best interest of shareholders (a caveat so vague, almost any reason Bostock, Yang & Co. dream up could potentially apply).
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