Monday, July 7, 2008

Microsoft Backs Icahn's Call for New Yahoo Board

Just when we thought the dust had settled, the Microsoft-Yahoo drama continues.

A lot happened today.

Billionaire investor Carl Icahn revealed that he is in talks with Microsoft about the potential acquisition of Yahoo if its current board is ousted at the upcoming Aug. 1 annual meeting.

Microsoft released a statement supporting Icahn's effort to unseat Yahoo!'s board and replace CEO Jerry Yang.

And Yahoo retaliated with a statement of its own, saying that it strongly opposes the Microsoft—Icahn plan of action.

In Icahn’s letter, he said that he and Microsoft chief Steve Ballmer have met several times to discuss "a transaction to purchase the Search function with large financial guarantees or, in the alternative, the whole company." By replacing the current board with members who are open to negotiations with Microsoft, Icahn said the Microsoft deal would move along smoothly, as it would prevent Yahoo CEO Jerry Yang from being able to "botch up" future negotiations.

Microsoft confirmed that the deal could move forward if the board is replaced. “We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the “Search” function with large financial guarantees or, in the alternative, purchasing the whole company,” said the company in a statement.

Yahoo said today: "Mr. Ballmer and Mr. Icahn 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. We feel very strongly that this would not lead to an outcome that would be in the best interests of Yahoo!'s stockholders. 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."

Microsoft said it was "premature" to discuss details of any future negotiation for Yahoo.

-- Michelle Savage

No comments: