Carl Icahn Leads Yahoo Shareholder Revolt

Billionaire Investor Vows To Oust Company's Directors In Wake Of Withdrawn Microsoft Bid

(AP)  Billionaire investor Carl Icahn is setting out to oust Yahoo Inc.'s board of directors for "irresponsible" and "unconscionable" actions that led Microsoft Corp. to withdraw a $47.5 billion offer to buy the slumping Internet pioneer.

In a letter sent Thursday to Yahoo Chairman Roy Bostock, Icahn wrote that outraged Yahoo shareholders had urged him to lead a campaign to replace Yahoo's 10 directors at the company's July 3 annual meeting in hopes of bringing Microsoft back to the bargaining table.

"I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies," Icahn wrote.

To give him leverage in the looming battle, Icahn revealed that he has spent more than $1 billion snapping up about 59 million Yahoo shares to give him a roughly 4 percent stake in the Sunnyvale-based company. He plans to seek approval from the Federal Trade Commission to acquire up to $2.5 billion in Yahoo stock.

A Yahoo representative said the company would respond to Icahn's attack "soon."

Besides himself, Icahn's alternate board of directors includes Internet entrepreneur Mark Cuban, who became a billionaire by selling Broadcast.com to Yahoo during the dot-com boom. Cuban used part of that windfall to buy the Dallas Mavericks, an National Basketball Association franchise that he still owns.

Icahn's other notable nominees include: venture capitalist Adam Dell, whose brother, Michael, founded Dell Inc.; and Frank Biondi Jr., the former chief executive of Viacom Inc.

The revolt threatens to jettison Jerry Yang from the company that he started with David Filo 14 years ago. Yang is one of Yahoo's directors and has been trying to engineer a turnaround since taking the job of CEO 11 months ago.

Yang and the rest of Yahoo's board are on hot seat for rejecting Microsoft's initial bid of $44.6 billion, or $31 per share, and taking measures that finally drove away the software maker.

Microsoft Chief Executive Steve Ballmer orally offered to raise the offer to $47.5 billion, or $33 per share, earlier this month. He withdrew the bid May 3 after Yang and Filo, acting on behalf of the Yahoo board, held out for $37 per share - a price that Yahoo's stock hasn't reached in more than two years.

Yang has argued Yahoo eventually will be worth more than $50 billion if it can expand its share of a rapidly growing Internet advertising market that so far has been dominated by rival Google Inc. In a forecast released while Yahoo tried to thwart the Microsoft bid, management predicted net revenue growth of at least 25 percent in 20009 and 2010 - well above its recent pace of 12 percent.

"It is irresponsible to hide behind management's more than overly optimistic financial forecasts," Icahn wrote. "It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72 percent premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer."

Yahoo shares rose 30 cents to $27.44 in morning trading Thursday.

[cjs_cnet_xyz]

Having Mr Icahn suggest that CEO Yang is irresponsible for not taking Microsoft''s offer is like a circus lion trainer telling a kid that his pet dog would be more comfortable in the lion cage. Threatening to oust the board is like paying the kid''s father behind his back for the dog to take it away anyhow. If Microsoft purchases Yahoo, there is no more Yahoo. It may linger for a few years, but it will be eliminated. Once more Microsoft will have destroyed an email provider. As a member of the public, I see it to my advantage to have multiple companies that provide email. I do not support any merger between Microsoft and Yahoo. It is against the public good.

[truth_police]

Icahn is a carpetbagging snake-oil swindler who has amassed billions of dollars looting companies for short-term profits. He is the "Slumlord" equivalent in the corporate world of opportunism. In just the few weeks since the Microsoft offer Yahoo stocks have jumped to near $28. Clearly Yahoo will very shortly be worth much more than the $33 per share Microsoft offered. These ruthless take-over scenarios are orchestrated by power brokers who simply want to steal the clientele and trash the company, very much like slumlords, who want to keep taking money out of the enterprise without ever putting any back in. Then they try to sell the gutted remainder before anyone realizes the booty has been plundered and looted to death.

[yongamerica]

Carl Icahn isn''t concerned about the long term welfare of Yahoo. Carl Icahn only concern is making a short term profit at the expense of long term gains.

[gumootn]

Yeah, that''s right Yahoo. Don''t take the MS offer because their mail is too slow. What the h*ll was MS thinking by making a big for Yahoo when their mail is so slow?

[hober_mallow]

"Yang has argued Yahoo eventually will be worth more than $50 billion if it can expand its share of a rapidly growing Internet advertising market that so far has been dominated by rival Google Inc..."

Yeah. And if pigs had wings they could fly.

I would''ve taken the $33 per share and rode my pig all the way to the bank.

[mecury69]

Good job Yahoo management! Do it on your own. Microsoft is hated by so many consumers it will mean doom to anything Yahoo represents. I''ll move my email to another competitive company as soon as a sale completes. Try the bloated and SLOW Hotmail Live to know Microsoft is not up to the task of running Yahoo.