Yahoo: Make Us An Offer

In a letter to Yahoo shareholders distributed yesterday as a press release, billionaire investor Carl Icahn lobbied for a new board and a replacement for Jerry Yang as CEO who has operating experience.

 

The billionaire activist investor wrote that after conversations with Microsoft CEO Steve Ballmer, the Microsoft CEO made it "abundantly clear that, due to his experiences with Yahoo during the past several months, he cannot negotiate any transaction with the current board. His logic is simple. If and when a transaction was consummated, Microsoft would be guaranteeing a great deal of capital at closing. However, a transaction could take at least nine months and perhaps longer to obtain regulatory clearance in the U.S., Europe, and elsewhere. During that period, if the current board and management team of Yahoo mismanage the company (and their recent track record is far from reassuring), Microsoft would be putting its money at risk and a great deal could be lost."

 

Yahoo responded by accusing Balmer and Icahn of conspiring to force Yahoo to sell its search business at a price that would not be in the best interest of shareholders.

 

"Yahoo's board of directors continues to stand ready to enter into negotiations with Microsoft Corporation for an acquisition of Yahoo. Indeed, as recently as June, Yahoo's independent directors and management approached Steve Ballmer about just such a transaction, only to be told that Microsoft was no longer interested even in the price range which they had previously proposed," according to the letter.

 

"If Microsoft and Mr. Ballmer really want to purchase Yahoo, we again invite them to make a proposal immediately. 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."

 

Icahn cited performance of Google versus Yahoo, pointing out that while "Google's income from operations grew 59 percent per year over the last two years, Yahoo's shrank 21 percent per year."