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 hisexperiences with Yahoo during the past several months, he cannot negotiateany transaction with the current board. His logic is simple. If and when atransaction was consummated, Microsoft would be guaranteeing a great dealof capital at closing. However, a transaction could take at least ninemonths and perhaps longer to obtain regulatory clearance in the U.S.,Europe, and elsewhere. During that period, if the current board andmanagement team of Yahoo mismanage the company (and their recent trackrecord is far from reassuring), Microsoft would be putting its money atrisk 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 intonegotiations with Microsoft Corporation for an acquisition of Yahoo.Indeed, as recently as June, Yahoo’s independent directors andmanagement approached Steve Ballmer about just such a transaction, onlyto be told that Microsoft was no longer interested even in the pricerange 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 aproposal immediately. And if Mr. Icahn has an actual plan for Yahoobeyond hoping that Microsoft might actually consummate a deal whichthey have repeatedly walked away from, we would be very interested inhearing it.”
Icahn cited performance of Google versus Yahoo, pointing out that while “Google’s income fromoperations grew 59 percent per year over the last two years, Yahoo’s shrank21 percent per year.”