Life isn’t getting any easier for Yahoo, as billionaire investor Carl Icahn is stepping up his campaign to take control of the company. This morning Icahn filed definitive proxy materials with the Securities and Exchange Commission, stating that he would put up nine directors in an attempt to replace the entirety of Yahoo’s incumbent board at the company’s annual meeting Aug. 1.
In the accompanying letter, Icahn appealed to Yahoo shareholders for support. In it he claimed that he had managed to revive negotiations with Microsoft to buy Yahoo’s search business, and had even secured a guarantee of minimum revenue, but that Yahoo had yet again squandered the opportunity and then issued a disingenuous corporate communique.
“Over the years I have attempted to make changes at many companies but I have yet to see a company distort, omit and twist events and facts in the manner that Yahoo has done in their press release issued Saturday night,” Icahn wrote.
Over the past two weeks, Icahn has been in frequent talks with Microsoft in an attempt to engineer a transaction where Microsoft would buy Yahoo’s search business and infuse the company with a multi-billion dollar equity investment.
Last week, Microsoft announced its opinion that it could no longer negotiate with Yahoo’s current board, suggesting that it would be amenable to reviving talks about a full or partial acquisition of Yahoo if Icahn succeeded in overturning the company’s management.
Backed into a corner, Yahoo rejected the latest offer for its search business claiming that it would have a destabilizing effect throughout a lengthy regulatory review and preclude a sale of the entire company. Yahoo claimed that it was better off with its ad deal with Google, and lashed back at the “opportunistic alliance” of Icahn and Microsoft.
“After negotiating among themselves without the involvement of Yahoo, Carl Icahn and Microsoft presented us with a ‘take it or leave it’ proposal under which we would be required to restructure the company, hand over to Microsoft Yahoo’s valuable search business and to Carl Icahn the rest of the company, giving us less than 24 hours to respond,” Yahoo Chairman Roy Bostock said. “It is ludicrous to think that our board could accept such a proposal. While this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders.”